Medicare Incentives

Medicare incentive for meaningful use of EHR Software

The Medicare EHR incentive program will provide incentive payments to eligible professionals (EPs) and eligible hospitals that demonstrate meaningful use of certified EHR technology. Participation can begin as early as 2011.

Eligible professionals who are meaningful EHR users can receive up to $44,000 over 5 years under the Medicare incentive program. And, there's extra incentive for eligible professionals who provide services in a Health Professional Shortage Area (HSPA). Eligible hospital incentive payments may begin as early as 2011 and are based on a number of factors, beginning with a $2 million base payment.

Medicare incentives compensate ‘meaningful EHR users’ with an amount equal to an additional 75% of the allowed charge for professional services furnished by physicians.

Medicare Payments and Penalties for Physicians

Non-hospital-based physicians will be eligible for a bonus payment built upon estimates of the allowed charges. The maximum medicare incenive amount, which would be paid either as a lump sum or all at once, are listed by year:

Incentive Paid in
Meaningful Use of a Certified EHR in
Failure to Adopt or demonstrate meaningful use of Certified EHR by
2011 2012 2013 2014 2015 2016 2017 2018
2011 $18K - - - -      
2012 $12K $18K - - -      
2013 $8K $12K $15K - -      
2014 $4K $8K $12K $12K -      
2015 $2K $4K $8K $8K -      
2016 $0 $2K $4K $4K -      
2017 $0 $0 $0 $0 -      
Total $44K $44K $39K $24K
-1% Penalty
-2% Penalty
-3% Penalty
-4% Penalty
HPSA $48.4K (+10%) $48.4K (+10%) $42.9K (+10%) $26.4K (+10%)

As shown above, Medicare payments are increased by 10% for providers located in a “health professional shortage area.”

Reductions in 2018 depend upon a determination by HHS that fewer than 75 percent of all physicians have adopted and use certified EHRs. HHS is authorized to continue payment reductions if the 75 percent threshold is not achieved, but in no case will the payment reductions go below 95 percent of the Medicare payment to which the provider would have otherwise been entitled.

Medicare Incentive Exclusions

The legislation clearly excludes hospital-based professionals (such as radiologists, pathologists, etc.) who work in an in-patient facility. There is an exception for professionals employed by a hospital, but who work in an ambulatory clinic or have billing arrangements where physicians submit claims to Medicare together with hospitals or other entities. The test for this is based on the setting where the provider furnishes services rather than billing or employment between a provider and hospital or other entity.

Medicare EHR Incentives

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