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Medicaid Incentive Program

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The Medicaid Electronic Health Record (EHR) Incentive Program provides incentive payments to Medicaid Eligible Professional (EP) who adopt, implement, upgrade or meaningfully use certified EHR technology in their first year of participation in the program, and successfully demonstrate MU in subsequent years.

Primary-care providers can earn up to $63,750 in incentive funding. The last year to begin participating in the Medicaid EHR Incentive Program is 2016. A provider must only demonstrate efforts to adopt, implement or upgrade to an EHR system in their first year of participation. To be eligible for the Medicaid EHR Incentive Program, an EP must meet a minimum of 30 percent Medicaid patient volume, and be one of the following types of Medicaid professionals:

  • Physicians
  • Pediatricians (special eligibility rules apply: 20 percent minimum Medicaid patient volume)
  • Nurse Practitioner
  • Certified Nurse-Midwives
  • Dentists
  • Physician Assistants who lead a Federally Qualified Health Center (FQHC) or Rural Health Clinic (RHC)

Note: Hospital-based EPs are generally not eligible to participate in the EHR Incentive Programs. The only exception is that Medicaid EPs practicing predominately in an FQHC or RHC are not subject to the hospital-based exclusion.

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Medicaid Incentive Payments

EPs may not receive EHR incentive payments from both the Medicare and Medicaid programs in the same year. In the event an EP qualifies for EHR incentive payments from both the Medicare and Medicaid programs, the EP must elect to receive payments from only one program and may only switch after receiving an incentive between the two programs once, and not after 2015. Furthermore, an EP who selects Medicaid must only receive incentive payments from one state in any payment year. After 2015, you can no longer switch incentive programs since there are no more incentive payments in the Medicare Incentive Program.

To be eligible to participate in the Medicaid EHR Incentive Program, an EP must either:

  • Meet certain Medicaid patient volume thresholds; or
  • Practice predominantly in an FQHC or RHC where 30 percent of the patient volume is derived from needy individuals1

Note: One exception to this rule is that a pediatrician may have at least 20 percent Medicaid patient volume and still qualify, but at a reduced incentive.

Click here for more information on the Medicaid Incentive Program.

Primary-care providers can earn up to $63,750 in incentive funding. The last year to begin participating in the Medicaid EHR Incentive Program is 2016.

Patient-Volume Calculation

The Medicaid patient-volume calculation method is designated by the State Medicaid Agency and approved by CMS. In general, patient volume is calculated by dividing the provider’s encounters with Medicaid-enrolled patients by the provider’s total number of service encounters.

Note: EPs should 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.

Timeframe

The Medicaid EHR Incentive Program is voluntary for state Medicaid agencies; however, all 50 states plus the territories are planning on participating. As of mid-2013, 49 states and three territories have launched Medicaid EHR Incentive Programs. If a state decides to opt out of the Incentive Program, EPs in that state will be unable to receive an incentive payment through Medicaid. State Medicaid agencies began offering a program as early as January 2011.

The last year to begin participating in the Medicaid EHR Incentive Program is 2016. EPs may receive Medicaid EHR incentive payments for up to six years; 2021 is the final year for Medicaid EHR incentive payments. For more information, visit the Medicaid State Information page: Last year of participation.

Payment Amounts

EPs who adopt, implement, upgrade or meaningfully use certified EHR technology in their first year of participation in the program and successfully demonstrate meaningful use in subsequent years may be eligible for an incentive payment of $21,250. In subsequent years of payment, a Medicaid EP’s incentive payment will be limited to $8,500.

Pediatricians who meet the 30 percent patient-volume requirement may qualify to receive the maximum incentive payments. Incentive payments for pediatricians who meet the 20 percent Medicaid patient volume but fall short of the 30 percent Medicaid patient volume are reduced to two-thirds of the incentive payment. This means some pediatricians may receive $14,167 in the first year and $5,667 in subsequent years.