Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

EHR Incentive Payments, Medicare Payment Adjustments in Brief

By Jacqueline DiChiara

- The EHR Incentive Programs comprise two distinct programs: one for Medicare and other for Medicaid providers.

The Medicare & Medicaid EHR Incentive Programs grant incentive payments for qualifying healthcare providers to actively utilize  EHR technology through demonstrating meaningful use (Medicare) or the adoption, implementation, upgrading, (AIU) or effective demonstration of meaningful use (Medicaid). The intended result of such actions is more positively influenced patient care.

As of the end of 2014, more than 339,000 Medicare eligible professionals (EPs) and 169,000 Medicaid EPs had active registrations for the EHR Incentive Programs. Those in the Medicare EHR Incentive Program can earn a maximum of $44,000; those in the Medicaid EHR Incentive Program, $63,750.

Over 5,000 eligible hospitals (EHs) and critical access hospitals (CAHs) can receive payments via meaningful use participation. Incentives are based on a $2 million base payment. Eligible hospitals must demonstrate meaningful use during the first participation year or in subsequent participation years.

CMS says hospitals eligible under both Medicare and Medicaid have additional options while registering.

Hospitals that are eligible for EHR incentive payments under both Medicare and Medicaid should select “Both Medicare and Medicaid” during the registration process, even if they plan to apply only for a Medicaid EHR incentive payment in the first year of participation by adopting, implementing, or upgrading certified EHR technology. Dually-eligible hospitals can then attest through CMS for their Medicare EHR incentive payment at a later date, if they so desire. It is important for a dually-eligible hospital to select “Both Medicare and Medicaid” from the start of registration in order to maintain this option.

Hospitals that register only for the Medicaid program (or only the Medicare program) will not be able to manually change their registration (i.e., change to “Both Medicare and Medicaid” or from one program to the other) after a payment is initiated and this may cause significant delays in receiving a Medicare EHR incentive payment.

As reported by, total program-to-date EHR incentive payments grew to $28.1 billion by the end of 2014. Medicare and Medicaid EPs have received $6.8 billion and $3.4 billion, respectively. Eligible hospitals, meanwhile, account for $17.4 billion in EHR incentive payments.

Introduction of Medicare payment adjustments

For the Medicare EHR Incentive Program, Congress mandated in the American Recovery and Reinvestment Act of 2009 (ARRA) that payment adjustments should be applied to EPs, EHs, and CAHs that are not meaningful users of certified EHR technology (CEHRT).  Medicare hospitals began to receive payment adjustments on October 1, 2014. Medicare EPs began receiving payment adjustments on January 1, 2015.

Early estimates for the very first set of 2015 Medicare payment adjustments for EPs were reported in early February 2015. Elizabeth Meyers of the Office of eHealth Standards and Services at CMS notes these estimates are based on historical claims volumes, with minimum payment adjustment amounts ranging between $1-$250 (34%) likely affecting the largest number of EPs. The rest break down as follows:

  • 21% (about 55,000) EPs adjustments between  $250 and $1,000
  • 14% (36,000) adjustments between $1,000 and $2,000
  • 31% (roughly 78,000) adjustments of at least $2,000

Providers avoid Medicare payment adjustments if they demonstrate meaningful use in either the Medicare EHR Incentive Program or in the Medicaid EHR Incentive Program. Not subject to payment adjustments, however, are Medicaid providers eligible to only participate in the Medicaid EHR Incentive Program.

Changes to meaningful use in 2015

The overall process of meeting meaningful use requirements for 2014 has recently experienced an advantageous change to help hospitals avoid the 2016 Medicare payment adjustment. Specifically, EHs had more time — an extension from the original date of November 30 to December 31 — to complete the meaningful use attestations for the Medicare EHR Incentive Program 2014 reporting year.

Previously, Medicare EPs and EHs had recourse only to meaningful use hardship exemptions which would give them the opportunity to avoid Medicare payment adjustment if they could prove that the cause or causes of their meaningful use non-compliance were beyond their control. CMS went as far as reopening the hardship exemption application submission period.

In January, CMS’s Deputy Administrator for Innovation & Quality and Chief Medical Officer Patrick Conway, MD first indicated that changes were coming to 2015 meaningful use.

The proposed changes to meaningful use in 2015 look to build on this momentum by making three sets of changes:

  • Realigning hospital EHR reporting periods to the calendar year to allow eligible hospitals more time to incorporate 2014 Edition software into their workflows and to better align with other CMS quality programs
  • Shortening the EHR reporting period in 2015 to 90 days to accommodate these changes
  • Modifying other aspects of the program to match long-term goals, reduce complexity, and lessen providers’ reporting burdens

Following Conway’s comment, American Medical Association (AMA) President-Elect Steven J. Stack, MD released a statement praising recent plans proposed by CMS to modify the EHR Incentive Programs and “address issues” related to meaningful use.

Stack also underlined a need to “provide the flexibility needed to allow more physicians to successfully participate in the Meaningful Use program and better align Meaningful Use with other quality reporting programs such as the Physician Quality Reporting System (PQRS) and the Value-base Modifier (VBM).”



Join 30,000 of your peers and get free access to all webcasts and exclusive content

Sign up for our free newsletter:

Our privacy policy

no, thanks

Continue to site...