1 Electronic Health Record Incentive Programs Eastern Michigan HFMA Insurance & Reimbursement...

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Electronic Health Record Incentive Programs

Eastern Michigan HFMAInsurance & Reimbursement Committee

January 28, 2013

Neal A. Cooper, Seyburn Kahn

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Electronic Health Record (EHR) Incentive Programs

• Background

• Process

• Calculations

• Compliance Considerations

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EHR Incentive Programs

Background

The American Recovery and Reinvestment Act of 2009, enacted January 6, 2009

• Created a new Office of the National Coordinator for Health Information Technology (ONC)

• Designated Division A, Title XII and Division B, Title IV the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”)

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Background

HITECH:• Added subsections (a)(7) and (o) to 42 USC § 1395w-4• Added subsection (n) to 42 USC § 1395ww• Added subsections (l) and (m) to 42 USC § 1395w-23• Made various changes in 42 USC § 1396b• Made certain other related and conforming changes

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Background

HITECH:• Created Medicare EHR Incentive Programs

– For Eligible Hospitals

– For Eligible Professionals

• Created Medicaid EHR Incentive Programs– For Eligible Hospitals

– For Eligible Professionals

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Background

Numerous Proposed Rules, Interim Final Rules, Final Rules issued to implement EHR incentive programs, especially:

– Stage 1 Final Rule (July 28, 2010 Fed. Reg.)– Stage 2 Final Rule (September 4, 2012 Fed. Reg.)

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Players– Department of Health & Human Services (HHS)– Centers for Medicare & Medicaid Services (CMS)– Office of the National Coordinator for Health

Information Technology (ONC)– Health IT Policy Committee (HITPC)

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Medicare EHR Incentive Programs– For Eligible Hospitals

• Subsection (d) hospitals (those paid under IPPS)• Critical Access Hospitals (CAHs)• Medicare Advantage (MA) Hospitals

– For Eligible Professionals• Doctors of medicine or osteopathy• Doctors of dental surgery or dental medicine• Doctors of podiatric medicine• Doctors of optometry• Chiropractors

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Medicaid EHR Incentive Programs– For Eligible Hospitals

• Acute care hospitals (including CAHs) with at least 10% Medicaid patient volume

• Children's hospitals (no Medicaid volume required)

– For Eligible Professionals• Physicians• Nurse practitioners• Certified nurse-midwives• Dentists• Physician Assistants (PAs) in PA-led Federally Qualified

Health Centers (FQHC) or rural health clinics (RHC)

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Medicaid & Medicaid EHR Incentive Programs– Certain Hospitals are Dually-Eligible

• IPPS hospital or CAH in the 50 U.S. States or the DC; and• At least 10% of patient volume from Medicaid encounters

– Eligible Professionals• May be eligible for both incentive programs• Must choose to receive payments under only one• Individuals participate, not groups (even if group owns EHR)• Hospital-based providers (>=90% of services furnished in

hospital to inpatients or in ED; POS 21 or 23) are not eligible

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Basics

• Eligible Hospitals and Professionals must demonstrate that they are “meaningful users” of certified EHR technology (CEHRT)– 3 Stages of Incentive Programs– EHR must be on the Certified Health IT

Product List: http://healthit.hhs.gov/CHPL

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Basics• Eligible Hospital “meaningful user,” defined:

– MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY. Use certified EHR technology in a meaningful manner.

– INFORMATION EXCHANGE. Certified EHR technology is connected to provide, in accordance with law and applicable standards, for electronic exchange of health information to improve quality of health care (e.g., promoting care coordination).

– REPORTING ON MEASURES USING EHR. Submits information for reporting periods on clinical quality and other specified measures.

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Basics• Eligible Professional “meaningful user,” defined:

– MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY. Use certified EHR technology in a meaningful manner, including electronic prescribing as deemed appropriate by Secretary.

– INFORMATION EXCHANGE. Certified EHR technology is connected to provide, in accordance with law and applicable standards, for electronic exchange of health information to improve quality of care (e.g., promoting care coordination).

– REPORTING ON MEASURES USING EHR. Submits information for reporting periods on clinical quality and other specified measures.

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Meaningful Use – determined by compliance with phased approach

• 3 Stages:– Stage 1– Stage 2– Stage 3

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Meaningful Use – Stage 1• Keys:

– electronically capturing health information in a structured format;– using that information to track key clinical conditions and

communicating that information for care coordination purposes;– implementing clinical decision support tools to facilitate disease

and medication management; and– using EHRs to engage patients and families and reporting

clinical quality measures and public health information.

• Focuses heavily on establishing the functionalities in CEHRT that will allow for continuous quality improvement and ease of information exchange.

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Meaningful Use – Stage 2• Keys:

– Rigorous expectations for health information exchange including:

• more demanding requirements for eprescribing;• incorporating structured laboratory results; and• the expectation that providers will electronically transmit

patient care summaries with each other and with the patient to support transitions in care.

• Encourage the use of health IT for continuous quality improvement at the point of care and the exchange of information in the most structured format possible.

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Meaningful Use – Stage 3 (not finalized)• Keys:

– Anticipated to focus on:• promoting improvements in quality, safety and efficiency

leading to improved health outcomes;• focusing on decision support for national high priority

conditions;• patient access to self-management tools;• access to comprehensive patient data through robust,

secure, patient-centered health information exchange; and• improving population health.

• CMS intends to propose higher Stage 3 standards for meeting meaningful use.

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Meaningful Use – Timeline• Different “year” for hospitals vs. professionals

– Eligible Hospitals use FFY (10/1 – 9/30)– Eligible Professionals use calendar year (1/1 – 12/31)

• Each stage runs at least 2 years• Special rule for 2014 (Stage 1 or 2) requires at least 90

days of compliance• Stage 1: Begins as early as 2011• Stage 2: Begins as early as 2014• Stage 3: Expected to begin in 2017

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• Incentives– Eligible Hospitals

• Medicare:– Annual payments– 2015 last year to begin Stage 1– Penalty of 1% to 5% if not meaningful user in 2015

• Medicaid:– Annual payments– 2016 last year to begin Stage 1– No penalty for not being meaningful user

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• Incentives– Eligible Professionals

• Medicare:– Maximum $44,000 over 5 years– 2014 last year to begin Stage 1 (maximum $24,000)– Penalty of 1% to 5% if not meaningful user in 2015

• Medicaid:– Maximum $63,750 over 6 years– 2016 last year to begin Stage 1– No penalty for not being meaningful user

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• Incentives for Eligible Hospitals Under Medicare Incentive Program– Medicare Annual payments:

($2 Million + Discharge-Related Amount)*x Medicare Sharex Transition Factor= Incentive Payment

– Minimum Initial Amount = $2 Million– Maximum Initial Amount = $6.37 Million

*Initial Amount

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• Incentives for Eligible Hospitals Under Medicare Incentive Program– Discharge-Related Amount (DRA)

• $200 x # of Hospital Discharges (all payors)– Excludes first 1,149 discharges– Excludes discharges after 23,000– Thus, maximum

» 21,851 discharges» $4,370,200 DRA ($200 x 21,851)» $6,370,200 Initial Amount ($2M + $4,370,200)

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• Incentives for Eligible Hospitals Under Medicare Incentive Program– Medicare Share

• Numerator:# Inpatient Part A Bed Days

+ # Inpatient Part C Days

• Denominator:Total Hospital Inpatient Days x

(Total Hospital Charges – Charity Care Charges)

÷ Total Hospital Charges

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• Incentives for Eligible Hospitals Under Medicare Incentive Program– Transition Factor

2011 2012 2013 2014 2015

2011 1.00

2012 .75 1.00

2013 .50 .75 1.00

2014 .25 .50 .75 .75

2015 .25 .50 .50 .50

2016 .25 .25 .25

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• Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital A:

Eligible for incentives beginning in FY 2011.

In FY 2010 (latest filed 12-month C/R):– 1,000 IP discharges– 3,000 Part A acute care inpatient-bed-days– 4,000 Part C acute care inpatient-bed-days– 10,000 total acute care inpatient bed-days.– $2,700,000 total charges excluding charity care– $3,000,000 total charges

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Discharges 1,000

Less 1,149 1,149

Discharges for Calculation* 0

x $200 / Discharge $200

Discharge-Related Amount $0.00

*Only count discharges from 1,150 – 23,000


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Part A Acute IP Days 3,000

Part C Acute IP Days 4,000

Numerator 7,000

Total Hospital IP Days 10,000

Charges Excluding Charity Care $2,700,000

Total Charges $3,000,000

Charge Ratio 0.90

Days x Charge Ratio 9,000

Medicare Share 0.78


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Base Amount: $2,000,000

Discharge-Related Amount $0.00

Initial Amount $2,000,000

Medicare Share 0.78

Transition Factor 1.0

Preliminary Incentive Payment $1,560,000


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• Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital B:


In FY 2013 (latest filed 12-month C/R):– 12,000 IP discharges– 20,000 Part A acute care inpatient-bed-days– 16,000 Part C acute care inpatient-bed-days– 45,000 total acute care inpatient bed-days.– $8,000,000 total charges excluding charity care– $9,000,000 total charges

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Discharges 12,000

Less 1,149 1,149

Discharges for Calculation* 10,851


Discharge-Related Amount $2,170,200



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Numerator 36,000




Charge Ratio 0.89


Medicare Share 0.90


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Medicare Share 0.90




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• Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital C:


In FY 2014 (latest filed 12-month C/R):– 25,000 IP discharges– 40,000 Part A acute care inpatient-bed-days– 23,000 Part C acute care inpatient-bed-days– 75,000 total acute care inpatient bed-days– $26,750,000 total charges excluding charity care– $28,000,000 total charges

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Discharges 25,000

Less 1,149 1,149






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Numerator 63,000




Charge Ratio 0.96


Medicare Share 0.88


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Medicare Share 0.88




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• Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital D:


In FY 2010 (latest filed 12-month C/R):– 25,000 IP discharges– 40,000 Part A acute care inpatient-bed-days– 23,000 Part C acute care inpatient-bed-days– 75,000 total acute care inpatient bed-days– $26,750,000 total charges excluding charity care– $28,000,000 total charges

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Discharges 25,000

Less 1,149 1,149






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Numerator 63,000




Charge Ratio 0.96


Medicare Share 0.88


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Medicare Share 0.88




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• Incentives for Eligible Hospitals Under Medicare Incentive Program – CAHs:– May qualify for Medicaid Program as acute hospital– For Medicare Program:

• Maximum 4 payment years• Last Year 1 is 2015• Reduced incentive payments if not participating by 2013• Penalties if not participating by 2015• Cost-based incentive payments

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• Incentives for Eligible Hospitals Under Medicare Incentive Program – CAHs:– Cost-based incentive payments

Reasonable cost for purchase of CEHRT

Multiplied by sum of:Medicare Share plus 20 percentage points

• Reimbursement reduced if not meaningful user by:– FY 2015, from 101% to 100.66% of reasonable costs

– 2016, from 100.66% to 100.33% of reasonable costs

– 2017 and on, from 100.33% to 100% of reasonable costs

– Reductions subject to maximum 5 years of hardship exemption

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• Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 1:


In FY 2011 (latest filed 12-month C/R):– 300 Part A acute care inpatient-bed-days– 400 Part C acute care inpatient-bed-days– 1,000 total acute care inpatient bed-days– $2,000,000 total charges excluding charity care– $2,200,000 total charges

Cost of EHR = $500,000; $100,000 depreciated in prior period

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Part A Acute IP Days 300

Part C Acute IP Days 400

Numerator 700




Charge Ratio 0.91

Days x Charge Ratio 910

Medicare Share 0.77


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Undepreciated EHR Cost $400,000

Medicare Share 0.77

+ 20 percentage points 0.20

Subtotal 0.97

Preliminary Incentive Payment $388,000


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In FY 2013 (latest filed 12-month C/R):– 6,000 Part A acute care inpatient-bed-days– 3,000 Part C acute care inpatient-bed-days– 14,000 total acute care inpatient bed-days– $8,000,000 total charges excluding charity care– $9,000,000 total charges

Cost of EHR = $350,000; $50,000 depreciated in prior period

$200,000 additional EHR expenses in 2014 (not depreciated)

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Numerator 9,000




Charge Ratio 0.89


Medicare Share 0.72


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Undepreciated EHR Cost* $500,000

Medicare Share 0.72

+ 20 percentage points 0.20

Subtotal 0.92

Preliminary Incentive Payment $460,000

*$350,000 - $50,000 + $200,000


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• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Medicaid Annual payments:

($2 Million + Discharge-Related Amount)*x Transition Factorx Medicaid Share= Incentive Payment

– Minimum Initial Amount = $2 Million– Maximum Initial Amount = $6.37 Million

*Initial Amount

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Discharge-Related Amount (DRA)

• $200 x # of Hospital Discharges (all payors)– Excludes first 1,149 discharges– Excludes discharges after 23,000– Thus, maximum

» 21,851 discharges» $4,370,200 DRA ($200 x 21,851)» $6,370,200 Initial Amount ($2M + $4,370,200)

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Transition Factor

• First year to begin receiving payments was 2011• Last year to begin receiving payments is 2016• 2011 – 2016, payment years need not be consecutive

Payment Year Year 1 Year 2 Year 3 Year 4

Factor 1.00 .50 .75 .25

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Medicaid Share

• Numerator:# Acute Inpatient Medicaid Days

+ # Acute Inpatient Medicaid Managed Care Days

• Denominator:Total Hospital Acute Inpatient Days x

(Total Hospital Charges – Charity Care Charges)

÷ Total Hospital Charges

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Medicaid Discharges

• Hospitals beginning program prior to 2013:– Payment Year 1 discharges derived from Medicare cost

report ending during FFY prior to Hospital’s FY serving as payment year 1

• Hospitals beginning program in 2013 or later:– Payment Year 1 discharges derived from most recent

12-month Medicare cost report prior to payment year

• Payment Years 2, 3, and 4:– Discharges calculated using Growth Rate

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• Hospitals beginning program prior to 2013:– Year 1 discharges from cost report ending during FFY prior to

Hospital’s FY serving as payment year 1

• Example 1:– Payment year 1 = 2011; FYE 6/30/2011

– Data from 6/30/2010


– Data from 10/30/2009

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• Hospitals beginning program in 2013 or later:– Payment Year 1 discharges derived from most recent 12-month

Medicare cost report prior to payment year


– Data from 6/30/2012 (assuming 12-month C/R)


– Data from 10/30/2012 (assuming 12-month C/R)

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• Payment Years 2, 3, and 4:– Regardless when hospital began program– Discharges calculated using Growth Rate– Growth rate is average of annual percentage change in

discharges over most recent 3 years of available data (preceding year 1 data year)

– Growth rate MAY BE NEGATIVE

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Medicaid Growth Rate Example

• Payment Year 1 = 2011; FYE 6/30• Year 1 data from 6/30/2010 Medicare C/R• Growth Rate data from 2006 – 2009 C/Rs

– 4 years’ data needed– 3-year average growth rate is used

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Prior Current Difference Growth %

FY 2006 16,000

FY 2007 16,000 16,500 500 3.13

FY 2008 16,500 17,000 500 3.03

FY 2009 17,000 17,500 500 2.94

Total 9.10

3-Year Average Growth Rate 3.03

• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Medicaid Growth Rate Example 1

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Prior Current Difference Growth %

FY 2006 16,000

FY 2007 16,000 15,500 -500 -3.13

FY 2008 15,500 14,000 -500 -3.22

FY 2009 14,000 13,500 -500 -3.57

Total -9.92

3-Year Average Growth Rate -3.31

• Incentives for Eligible Hospitals Under Medicaid Incentive Program– Medicaid Growth Rate Example 2

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program – Hospital E:


In FY 2010 (latest filed 12-month C/R):– 3.03% Average Growth Rate (see Example 1)– 22,000 Discharges– 17,500 Part A acute care inpatient-bed-days– 1,350 Part C acute care inpatient-bed-days– 50,000 total acute care inpatient bed-days– $4,000,000 total charges excluding charity care– $5,000,000 total charges

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Total Discharges for FY 2010: 22,000

Per Discharge

Total Discharges*

Disallowed Allowed Amount

Year 1 $200 22,000 1,149 20,851 $4,170,200

Year 2 $200 22,667 1,149 21,518 $4,303,615

Year 3 $200 23,354 1,149 21,851 $4,370,200

Year 4 $200 24,063 1,149 21,851 $4,370,200

Total Discharge Related Amount $17,214,215

*2010 Discharges Updated using Average Growth Rate for years 2 – 4

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Year 1 Year 2 Year 3 Year 4

Base Amount: $2,000,000 $2,000,000 $2,000,000 $2,000,000

Discharge-Related Amount

$4,170,200 $4,303,615 $4,370,200 $4,370,200

Aggregate EHR Amount

$6,170,200 $6,303,615 $6,370,200 $6,370,200

Transition Factor 1.00 0.75 0.50 0.25

Subtotals $6,170,200 $4,727,711 $3,185,100 $1,592,550

4-Year Overall Amount $15,675,561


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Medicaid IP Days 17,500

Medicaid Managed Care IP Days

1,350

Numerator 18,850




Charge Ratio 0.80


Medicare Share 47.13%


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4-Year Overall Amount $15,675,561

Medicaid Share 47.13%

Medicaid Aggregate EHR Incentive Amount $7,387,892


Payments are disbursed according to the State Plan over at least 3 years and at most 6 years.

In any given payment year, annual Medicaid incentive payment may not exceed 50% of the hospital’s aggregate incentive payment.

Over 2 payment years, annual Medicaid incentive payments may not exceed 90% of the hospital’s aggregate incentive payment.

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• Incentives for Eligible Hospitals Under Medicaid Incentive Program:Notes regarding data:– Acute IP discharges and bed-days are limited to those from the

acute care portion of hospital– Dual-eligible patient days are excluded from Medicaid Share

numerator but not denominator– State may not include estimates for:

• acute IP bed-days attributable to individuals for whom payment may be made under Medicare Part A, or

• acute IP bed-days attributable to individuals who are enrolled with Medicare Advantage under Medicare Part C.

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• Incentives for Eligible Hospitals Under EHR Incentive Programs:Notes regarding data, cont’d (Acute IP only):– In response to comments asking CMS to clarify that non IPPS

discharges (e.g., nursery) should be included, CMS stated that:• [T]he statutory language clearly restricts the discharges to be

counted for purposes of determining the discharge-related amount to discharges from the acute care portion of the hospital.

• [T]hese days are excluded [from] total inpatient bed days in the denominator of the Medicare share fraction.

• Statutory parameters placed on Medicaid incentive payments to hospitals are largely based on the methodology applied to Medicare incentive payments. [Thus, applies to Medicare and Medicaid IPs.]

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• Incentives for Eligible Hospitals Under Medicare Incentive Program– Data elements from 2552-96:

• Total Discharges - S-3 Pt. 1, Col. 15, Line 12• IP Part A Days - S-3 Pt. 1, Col. 4, Line 1 + Lines 6 through

10• IP Part C Days - S-3 Pt. 1, Col. 4, Line 2• Total IP Days - S-3 Pt. 1, Col. 6, Line 1 + Lines 6 through 10• Total Charges - C Pt. 1, Col. 8, Line 101• Charity Care Charges - S-10, Column 1, Line 30

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• Incentives for Eligible Hospitals Under Medicare Incentive Program– Data elements from 2552-10:

• Total Discharges - S-3 Pt. 1, Col. 15, Line 14• IP Part A Days - S-3 Pt. 1, Col. 6, Line 1 + Lines 8 through

12• IP Part C Days - S-3 Pt. 1, Col. 6, Line 2• Total IP Days - S-3 Pt. 1, Col. 8, Line 1 + Lines 8 through 12• Total Charges - C Pt. 1, Col. 8, Line 200• Charity Care Charges - S-10, Column 3, Line 20

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• Incentives for Eligible Professionals Under Medicare Incentive Program– An Eligible Professional who participates in the Medicare EHR

Incentive Program may also participate in the Medicare Physician Quality Reporting System.

– An Eligible Professional who participates in the Medicare EHR Incentive Program MAY NOT receive an incentive payment under the Electronic Prescribing (eRx) initiative.

– An Eligible Professional who participates in the Medicaid EHR Incentive Program MAY receive an incentive payment under the Electronic eRx initiative.

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• Incentives for Eligible Professionals Under Medicare Incentive Program– Incentive payment, subject to annual limit,

equals 75% of EP’s Medicare allowed charges under physician fee schedule

– Charges are for claims for services furnished during the CY, submitted during or within 2 months of CY end

• Example: CY 2013 charges are for CY 2013 services, if claims are submitted by 2/28/2014

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• Incentives for Eligible Professionals Under Medicare Incentive Program– EPs may begin receiving IP payments in any CY from

2011 – 2014– EPs may receive IP payments for up to 5 years– EPs beginning after 2012 receive less than maximum– EPs beginning in 2013 receive payments for 4 years– EPs beginning in 2014 receive payments for 3 years– EPs qualifying as Medicare Advantage Organization

affiliate is paid equal to Medicare IP participant.

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• Incentives for Eligible Professionals Under Medicare Incentive Program

Maximum IP Payments Based on EP’s Year 1

Calendar Yr 2011 2012 2013 2014

2011 $18,000

2012 $12,000 $18,000

2013 $8,000 $12,000 $15,000

2014 $4,000 $8,000 $12,000 $12,000

2015 $2,000 $4,000 $8,000 $8,000

2016 $2,000 $4,000 $4,000

Total $44,000 $44,000 $39,000 $24,000

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• Incentives for Eligible Professionals Under Medicare Incentive Program– Special rule for EPs who predominantly furnish > 50%

of services in Health Professional Shortage Area (HPSA)

– Maximum IP payment limit is increased by 10%– No effect if EP furnishes services in HPSA but 75% of

PFS charges does not exceed the non-HPSA limit

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• Incentives for Eligible Professionals Under Medicare Incentive Program – HPSA Only


Calendar Yr 2011 2012 2013 2014

2011 $19,800

2012 $13,200 $19,800

2013 $8,800 $13,200 $16,500

2014 $4,400 $8,800 $13,200 $13,200

2015 $2,200 $4,400 $8,800 $8,800

2016 $2,200 $4,400 $4,400

Total $48,400 $48,400 $42,900 $26,400

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• Incentives for Eligible Professionals Under Medicare Incentive Program– If not a meaningful user by 2015, EP’s payments are

adjusted to 99% of PFS covered amount– If not a meaningful user by 2016, EP’s payments are

adjusted to 98% of PFS covered amount– If not a meaningful user after 2016, EP’s payments

are adjusted to 97% of PFS covered amount– After 2017, if < 75% of EPs are meaningful users,

payment adjustment decreases 1% each year until it falls to 95% of PFS covered amount

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• Incentives for Eligible Professionals Under Medicaid Incentive Program– An EP who adopts, implements, upgrades, or meaningfully uses

CEHRT in year 1 of Medicaid IP or demonstrates meaningful use thereafter may receive payments under the Medicaid IP.

– Eligible Professionals for the Medicaid IP include:• Physicians

• Dentists

• Certified nurse-midwives

• Nurse practitioners

• Physician assistants practicing in:– a Federally Qualified Health Center (FQHC) or– a Rural Health Center (RHC) led by a physician assistant

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• Incentives for Eligible Professionals Under Medicaid Incentive Program– Hospital-based EPs are generally not eligible to participate in the EHR

Incentive Programs, exception that Medicaid EPs practicing predominately in an FQHC or RHC are not subject to the hospital-based exclusion.

– EPs may not receive EHR incentive payments from both the Medicare and Medicaid IPs in the same year. If an EP qualifies for EHR incentive payments from both the Medicare and Medicaid IPs:

• EP must elect to receive payments from only one IP• EP may only switch between the two IPs once• EP may not switch IPs after 2015

– An EP who selects Medicaid must only receive incentive payments from one state in any payment year.

– Not yet available in NV, HI, or DC

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• Incentives for Eligible Professionals Under Medicaid Incentive Program– EP must either

• meet the Medicaid patient volume threshold, or• practice predominantly in an FQHC or RHC where 30

percent of the patient volume is derived from needy individuals

– “needy individuals” are:

» Eligible for Medicaid or CHIP

» Furnished uncompensated care by the EP, or

» Furnished services at either no cost or reduced cost based on a sliding scale determined by individual’s ability to pay

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• Incentives for Eligible Professionals Under Medicaid Incentive Program– Medicaid Patient Volume Threshold

• EP's # of Medicaid-enrolled patient encounters ÷ EP's total # of service encounters

• Include individuals enrolled in Medicaid managed care organizations, prepaid inpatient health plans, prepaid ambulatory health plans, and Medicaid medical home programs or Primary Care Case Management

• Medicaid volume threshold is 30% (20% for pediatricians, subject to reduced IP payment)

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• Incentives for Eligible Professionals Under Medicaid Incentive Program


Calendar Yr 2011 2012 2013 2014 2015 2016

2011 $21,250

2012 $8,500 $21,250

2013 $8,500 $8,500 $21,250

2014 $8,500 $8,500 $8,500 $21,250

2015 $8,500 $8,500 $8,500 $8,500 $21,250

2016 $8,500 $8,500 $8,500 $8,500 $8,500 $21,250

2017 $8,500 $8,500 $8,500 $8,500 $8,500

2018 $8,500 $8,500 $8,500 $8,500

2019 $8,500 $8,500 $8,500

2020 $8,500 $8,500

2021 $8,500

Total $63,750 $63,750 $63,750 $63,750 $63,750 $63,750

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• Incentives for Eligible Professionals Under Medicaid Incentive Program – Pediatricians < 30% Patient Volume Requirement


Calendar Yr 2011 2012 2013 2014 2015 2016

2011 $14,167

2012 $5,667 $14,167

2013 $5,667 $5,667 $14,167

2014 $5,667 $5,667 $5,667 $14,167

2015 $5,667 $5,667 $5,667 $5,667 $14,167

2016 $5,665 $5,667 $5,667 $5,667 $5,667 $14,167

2017 $5,665 $5,667 $5,667 $5,667 $5,667

2018 $5,665 $5,667 $5,667 $5,667

2019 $5,665 $5,667 $5,667

2020 $5,665 $5,667

2021 $5,665

Total $42,500 $42,500 $42,500 $42,500 $42,500 $42,500


• Tracking EP Payments– Medicaid

• Payments come on physician remits

• Access payment information in CHAMPS

– Medicare• Payments come with remit wires

• EDI addenda records for the ACH transactions are included with the EFT, including NPIs and amounts

– Usually available as a report from the bank’s website, but it varies from bank to bank

– It may be referred to as a CTX or CCD addenda record report82

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• Reporting Payments

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• Compliance Considerations– EHR Stark Law Exception

• 42 USC § 411.357(w)• Sunset: 12/31/2021 (see 12/27/2013 Final Rule)

– EHR Anti-kickback Statute Safe Harbor• 42 USC § 1001.952(y)• Sunset: 12/31/2021 (see 12/27/2013 Final Rule)

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• EHR Stark Law Exception– Certain software or IT and training services

necessary and used predominantly to create, maintain, transmit, or receive EHRs are not “compensation” under the Stark Law if:

• EHR is interoperable• Parties are acceptable• Use is acceptable• Agreement is acceptable

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• EHR Stark Law Exception– EHR is interoperable

• EHR software must be interoperable at the time it is provided to the recipient. EHR software is deemed to be interoperable if, on the date it is provided to the recipient, it has been certified by a certifying body authorized by the ONC to an edition of the EHR certification criteria identified in the then-applicable version of 45 CFR part 170.

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• EHR Stark Law Exception– Parties are acceptable

• The items and services must be provided to an individual or entity engaged in the delivery of health care by an “entity” under 42 CFR § 411.351:

– A physician practice;– Any other person or organization that furnishes Stark

designated health services, but not a laboratory company; or

– A health plan, MCO, PSO, or IPA.

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• EHR Stark Law Exception– Use is acceptable

• The donor (or any person on the donor’s behalf) may not limit or restrict the use, compatibility, or interoperability of the items or services with other electronic prescribing or EHR systems (including, but not limited to, HIT applications, products, or services).

• Neither the physician nor the physician's practice (or any employees or staff members) may make receipt of items or services, or the amount or nature of items or services, a condition of doing business with the donor.

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• EHR Stark Law Exception– Use is acceptable, cont’d

• Neither eligibility for, nor the amount or nature of, items or services may directly take into account volume or value of referrals or other business generated between the parties. Compliance is deemed if the determination uses any one of the following bases:

– total number of prescriptions written by physician (but not volume or value of prescriptions dispensed or paid by donor or billed to a Federal health care program);

– size of physician's medical practice (e.g., total patients, total patient encounters, or total relative value units);

– total number of hours that physician practices medicine;– physician's overall use of automated technology in medical practice

(excluding technology used in connection with referrals made to donor);– whether physician is member of donor's medical staff, if applicable;– level of uncompensated care provided by physician; or– any reasonable and verifiable manner that does not directly take into

account volume/value of referrals or other business generated between parties.

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• EHR Stark Law Exception– Use is acceptable, cont’d

• Donor must not have actual knowledge of, or act in reckless disregard or deliberate ignorance of, the fact that physician possesses or has obtained items or services equivalent to those provided by donor.

• For items or services that can be used for any patient without regard to payor status, donor must not restrict, or take any action to limit, physician's right or ability to use items or services for any patient.

• Items and services must neither include physician's office staffing nor be used primarily to conduct personal business or business unrelated to physician's medical practice.

• Electronic prescribing capability is no longer required.

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• EHR Stark Law Exception– Agreement is acceptable

• The arrangement is set forth in a written agreement that —– Is signed by the parties;

– Specifies the items and services provided, donor's cost of items and services, and amount of the physician's contribution; and

– Covers all EHR items and services to be provided by donor (or any affiliate). Acceptable to incorporate by reference all separate agreements between donor (and affiliated parties) and physician, or to cross-reference master list of agreements maintained (in a manner that preserves historical record of agreements) and updated centrally and available for HHS review upon request.

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• EHR Stark Law Exception– Agreement is acceptable, cont’d

• Before receipt of items and services, physician must pay 15 percent of donor's cost for the items and services. Donor (nor any affiliated individual or entity) must not finance physician's payment or loan physician funds to pay for items and services.

• Arrangement must not violate Anti-kickback Statute or any federal or state law or regulation governing billing or claims submission.

• Transfer of items and services must occur, and all safe harbor conditions must be satisfied, on or before December 31, 2021.

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• EHR Anti-kickback Statute Safe Harbor– Certain software or IT and training services

necessary and used predominantly to create, maintain, transmit, or receive EHRs are not “remuneration” under the Anti-kickback Statute if:

• EHR is interoperable• Parties are acceptable• Use is acceptable• Agreement is acceptable

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• EHR Anti-kickback Statute Safe Harbor– EHR is interoperable

• EHR software must be interoperable at the time it is provided to the recipient. EHR software is deemed to be interoperable if, on the date it is provided to the recipient, it has been certified by a certifying body authorized by the ONC to an edition of the EHR certification criteria identified in the then-applicable version of 45 CFR part 170.

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• EHR Anti-kickback Statute Safe Harbor– Parties are acceptable

• The items and services must be provided to an individual or entity engaged in the delivery of health care by:

– An individual or entity, other than a laboratory company, that provides services covered by a Federal health care program and submits claims or requests for payment, either directly or through reassignment, to the Federal health care program; or

– A health plan.

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• EHR Anti-kickback Statute Safe Harbor– Use is acceptable

• The donor (or any person on the donor’s behalf) may not limit or restrict the use, compatibility, or interoperability of the items or services with other electronic prescribing or EHR systems (including, but not limited to, HIT applications, products, or services).

• Neither the beneficiary nor the recipient's practice (or any affiliated individual or entity) may make receipt of items or services, or the amount or nature of items or services, a condition of doing business with the donor.

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• EHR Anti-kickback Statute Safe Harbor– Use is acceptable, cont’d

• Neither eligibility for, nor the amount or nature of, items or services may directly take into account volume or value of referrals or other business generated between the parties. Compliance is deemed if the determination uses any one of the following bases:

– total number of prescriptions written by beneficiary (but not volume or value of prescriptions dispensed or paid by donor or billed to a Federal health care program);

– size of recipient's medical practice (e.g., total patients, total patient encounters, or total relative value units);

– total number of hours that beneficiary practices medicine;– recipient's overall use of automated technology in medical practice

(excluding technology used in connection with referrals made to donor);– whether beneficiary is member of donor's medical staff, if applicable;– level of uncompensated care provided by recipient; or– any reasonable and verifiable manner that does not directly take into

account volume/value of referrals or other business generated between parties.

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• EHR Anti-kickback Statute Safe Harbor– Use is acceptable, cont’d

• Donor must not have actual knowledge of, or act in reckless disregard or deliberate ignorance of, the fact that beneficiary possesses or has obtained items or services equivalent to those provided by donor.

• For items or services that can be used for any patient without regard to payor status, donor must not restrict, or take any action to limit, recipient's right or ability to use items or services for any patient.

• Items and services must neither include staffing of recipient's office nor be used primarily to conduct personal business or business unrelated to recipient's clinical practice or clinical operations.

• Electronic prescribing capability is no longer required.

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• EHR Anti-kickback Statute Safe Harbor– Agreement is acceptable

• The arrangement is set forth in a written agreement that —– Is signed by the parties;

– Specifies the items and services provided, donor's cost of items and services, and amount of the recipient's contribution; and

– Covers all EHR items and services to be provided by donor (or any affiliate). Acceptable to incorporate by reference all separate agreements between donor (and affiliated parties) and beneficiary, or to cross-reference master list of agreements maintained (in a manner that preserves historical record of agreements) and updated centrally and available for HHS review upon request.

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• EHR Anti-kickback Statute Safe Harbor– Agreement is acceptable, cont’d

• Before receipt of items and services, beneficiary must pay 15 percent of donor's cost for the items and services. Donor (nor any affiliated individual or entity) must not finance recipient's payment or loan beneficiary funds to pay for items and services.

• Donor must not shift costs of items or services to any Federal health care program.

• Transfer of items and services must occur, and all safe harbor conditions must be satisfied, on or before December 31, 2021.

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Electronic Health Record Incentive Programs

Eastern Michigan HFMAInsurance & Reimbursement Committee

January 28, 2013

Neal A. Cooper, Seyburn [email protected]

248-353-7620

Questions?

mailto:[email protected]

1 Electronic Health Record Incentive Programs Eastern Michigan HFMA Insurance & Reimbursement...

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