Health Care Providers Get Ready: EHR Incentive Payments Are Coming

January 26, 2011

By HunterMaclean Attorneys

Published in Business in Savannah

The first electronic health record (EHR) incentive program payments funded by the federal government were made on January 5, 2011, with $2.86 million going to the University of Kentucky Healthcare (a group of hospitals and other facilities), and $21,250 going to each of two physicians at a family clinic in Durant, Oklahoma.

Congress set aside approximately $17 billion as incentives for eligible professionals, eligible hospitals, and critical access hospitals to adopt EHRs, pursuant to the Health Information Technology for Economic and Clinical Health (HITECH) Act, a portion of the American Recovery and Reinvestment Act of 2009.

Medicare and Medicaid have separate EHR incentive programs. Detailed information on the programs is available from the U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services (, and the Office of the National Coordinator for Health Information Technology ( The federal government will fund and administer the Medicare EHR incentive program. The federal government will also fund the Medicaid EHR incentive program, but that program will be administered by the states.

Because EHR incentive payments are made to eligible professionals on an individual basis, every eligible professional in a practice should apply for the payments. Although the definition of an eligible professional is different under each program, a health care provider may qualify as an eligible professional under both programs, in which case the provider must choose one program or the other, because a provider cannot receive EHR incentive payments through both programs. If the goal is to maximize payments, a provider who qualifies as an eligible professional under both programs should choose the Medicaid EHR incentive program, provided your state is participating in the program, because it yields the highest payment.

The following are eligible professionals under the Medicare EHR incentive program: 1) doctors of medicine or osteopathy, 2) doctors of oral surgery or dental medicine, 3) doctors of podiatric medicine, 4) doctors of optometry, and 5) chiropractors. To qualify for the incentive payments under the Medicare EHR incentive program, an eligible professional must demonstrate “meaningful use” of “certified EHR technology” for an “EHR Reporting Period.”

Incentive payments under the Medicare EHR incentive program may be received for a maximum of 5 years. The amount of an incentive payment is equal to 75% of the estimated allowed charges for covered professional services furnished by the eligible professional during that year, subject to an annual maximum. The maximum Medicare EHR incentive payment for an eligible professional is $44,000, spread over all 5 covered years. In order to receive the maximum Medicare EHR incentive payment, an eligible professional must achieve meaningful use of certified EHR technology in 2011 or 2012.

The following qualify as eligible professionals under the Medicaid EHR incentive program: 1) physicians, 2) dentists, 3) certified nurse-midwives, 4) nurse practitioners, and 5) physician assistants practicing in a Federally Qualified Health Center (FQHC) or a Rural Health Clinic (RHC) led by a physician assistant.

To qualify for the Medicaid EHR incentive program, an eligible professional must either: 1) provide at least 30% of his or her services to Medicaid patients (may be reduced to 20% for pediatricians, but a reduction in percentage results in reduced incentive payments to the pediatrician); or 2) provide more than 50% of services in a FQHC or RHC with a minimum of 30% of patients qualifying as “needy individuals.”

The first incentive payment to an eligible professional under the Medicaid EHR incentive program may be based on adoption or implementation of, or an upgrade to, certified EHR technology. Thereafter, the eligible professional must show “meaningful use” of “certified” EHR technology for an “EHR Reporting Period,” as described in more detail below. The maximum Medicaid EHR incentive payment for an EP is $63,750, spread over 6 years, with a payment of $21,250 for the first year and $8,500 for the next 5 years.

Registration for both incentive programs opened on January 3, 2011, and is available online at CMS’s website, You do not have to establish meaningful use of certified EHR technology to register. As of January 7, approximately 4,000 providers had already initiated registration for the programs. Attestation will be required to begin receiving incentive payments, but attestation is a separate process by which an eligible professional attests that he or she has achieved meaningful use of certified EHR technology for a given EHR Reporting Period, or, for the first year under the Medicaid EHR incentive program, that he or she has adopted, implemented, or upgraded to certified EHR technology.

Eligible professionals who intend to participate in an EHR incentive program should begin the process of acquiring certified EHR technology now, because the process of selecting and acquiring certified EHR technology can take months, and implementing the technology and achieving meaningful use for an EHR Reporting Period will take much longer. Medicare EHR incentive payments are scheduled for distribution beginning in April 2011. Medicaid EHR incentive payments have already been distributed in some states. South Carolina’s program opened on January 3 and Georgia’s will open sometime this year.

To begin the process of participating in an EHR incentive program, register now with CMS, and consult with someone with experience in the acquisition of certified EHR technology. Also, consult with a legal advisor with experience in reviewing and negotiating contracts for the purchase of certified EHR technology. Though the terms of EHR contracts may vary, there are essential legal provisions that need to be in every EHR contract.

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