How does the stimulus plan apply to medical practices?
What payment incentives are available to physicians?
How does the Medicare incentive program work?
How does the Medicaid incentive program work?
Are hospital-based eligible professionals excluded from ARRA EHR incentives?
How is "meaningful use" defined?
Is edgeMED's EHR offering certified and does it have the features and functionality to meet the government's criteria?
How do I register for the incentive program and collect my incentive payments?
Are there financial benefits available now, even before incentive money becomes available?
What will happen if I decide not to implement an EHR?
What if I have already purchased an EHR and am a "meaningful user"?
How does the stimulus plan apply to medical practices?The Federal stimulus package contains $19 billion to accelerate the adoption and meaningful use of electronic health records (EHR). This money is provided to physician’s nationwide to assist in the deployment of health information technology to reduce medical expenses and improve patient care.
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What payment incentives are available to physicians?Incentive funds are available through Medicare and Medicaid programs. Each has its own set of eligibility criteria, requirements, and incentive amounts. Eligible physicians must choose to accept payments under either the Medicare or Medicaid programs and are not entitled to receive payments from both.
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How does the Medicare incentive program work?The stimulus plan calls for eligible physicians in ambulatory medical practices to possibly receive $44,000 or more over a 5 year period for utilizing a qualified electronic health records system. Fundamentally, the program is straightforward. CMS will provide EHR incentive payments to physicians who can demonstrate they are “meaningful users” of a certified electronic health record. The incentive amount is calculated as 75% of Medicare Part B billings. The bonuses will be offered through 2015. Physicians that do not implement EHR technology by 2015 will suffer a 1% reduction in Medicare Payments (reductions will continue to increase after 2015).
The Medicare potential payment schedule is:
How does the Medicaid incentive program work?The stimulus plan calls for eligible physicians to potentially receive up to $63,750 for utilizing a qualified electronic health records system. For practices that have not implemented an EHR, the Medicaid program offers up to $21, 250 per physician to aid the purchase and implementation of a system (the physician must purchase before 2016 to be eligible). Thereafter, the Medicaid incentives offer up to $8,500 per physician for “meaningful use” of the EHR. The “meaningful use” payments will be available for up to 5 years (with no payments being made after 2021). Providers are not required to begin participating in the incentive program in 2011, however, providers must begin receiving payments no later than 2016 in order to qualify. For the first year in which meaningful use was attested, a minimum reporting period of 90 consecutive days will be identified by the provider. This allows providers to receive that year’s payment even if the EHR was not implemented until October 1 of that year. States are expected to issue payments on a rolling basis, thus once the reporting period is complete and the necessary reports and attestations have been submitted, payment can be issued. In subsequent years, the provider will need to report on the entire year.
ARRA established the following payment amounts for eligible professionals under the Medicaid program: 85% of “net average allowable costs” related to EHR purchase, updates, training, implementation, and maintenance (excludes any discounts or technology donations received), capped at $25,000 for payment year 1 and $10,000 for Years 2-6 (i.e., professionals may receive up to 85% of $25,000 for Year 1). For pediatricians with a Medicaid patient volume of 20-29%, the cap is 2/3 of the $25,000 in Year 1 and 2/3 of the $10,000 in Year 2. Allowable costs include costs associated with: purchase and support services, implementation, training, upgrades, costs of operating, maintaining and using the application.
Therefore, physicians could receive as much as $21,250 in Year 1 (85% of 25,000) and $8,500 (85% of 10,000) per year in Years 2-6, for a total amount of $63,750. Pediatricians with 20-29% Medicaid patient volume are eligible for up to $14,167 in Year 1 and $5,667 in Years 2-6, for a total of $42,500.
An eligible physician in the Medicaid incentive program is:
Are hospital-based eligible professionals excluded from ARRA EHR incentives?ARRA provides that no Medicare incentive payments for meaningful use of certified EHR technology may be made to hospital-based eligible professionals. ARRA defines a “hospital-based professional” as an otherwise eligible professional, such as a pathologist, anesthesiologist, or emergency physician, who furnishes substantially all of his or her covered professional services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and equipment, including qualified electronic health records, of the hospital.
The determination of whether an eligible professional is a hospital-based eligible physician is to be made on the basis of the site of service (as defined by the DHHS Secretary). EHR incentive payments will not be made to physicians who:
It is important to note that “hospital-based” does not focus on the employment or billing arrangement, but rather on the site of service. The foregoing may mean that in situations where a hospital employs a physician and handles the physician’s billing, this arrangement in and of itself does not make a physician “hospital-based.” If the physician’s practice is not conducted in a facility that is part of the site “licensed” as a hospital, then under the proposed rules the physician may not be practicing in a “hospital setting” and therefore not considered “hospital based,” assuming of course the physician does not exceed the 90% threshold “site of service” test.
How is “meaningful use” defined?A meaningful user is an eligible professional (physician) that:
Is edgeMED’s EHR offering certified and does it have the features and functionality to meet the government’s criteria?edgeMED’s solution not only meets, but exceeds the criteria specified in the American Recovery and Reinvestment Act of 2009. Our EHR solution is ONC certified by Drummond Group and meets the Meaningful Use certification criteria. $72 million in development dollars have been earmarked to make sure our EHR offerings meets these and other requirements. That’s more money than some EHR vendors make in an entire year. The Time is NOW.
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How do I register for the incentive program and collect my incentive payments?The Centers for Medicare and Medicaid Services is giving healthcare providers the ability to track online the status of the incentive payments they are due for meaningful use adoption of electronic health records, similar to the “Where’s My Refund” feature on the Internal Revenue Service’ income tax site. Once CMS has notified providers they have met meaningful use requirements they will be able to determine the status of their payments at the same site they registered for the incentives and attested to meeting the meaningful use criteria. Providers will be able to click on the status tab and see what the current status of their payment is, for example, payment pending, payment ready, check issued, payment in progress or payment successful.
CMS will open registration for the incentive program beginning Jan. 3, 2011. Providers who are Medicare participants must be registered in the agency’s Provider Enrollment, Chain and Ownership System (PECOS), which is available online through the CMS Web site. PECOS manages, tracks and validates the enrollment of providers and suppliers in the Medicare program.
To qualify for incentives, providers must verify they have demonstrated meaningful use of certified electronic health records for 90 days. When they are ready to do that, CMS will guide them to an attestation module through which they will answer questions and perform some calculations. The earliest that CMS could make payments is April 2011.
As part of eligibility for the maximum meaningful use incentives, physicians and practices must provide a threshold of Medicare services. They must bill Medicare for at least $24,000 in claims for 2011 before they can receive the maximum incentive payment of $18,000, even if they have already attested to complying with meaningful use requirements and been approved. Most Medicare providers are expected to reach that level at some point during the year. When providers reach that threshold, the payment file contractor will generate electronic payment of the incentives through the same bank account that they receive payment for Medicare claims.
Are there financial benefits available now, even before incentive money becomes available?Section 179 tax advantage is better than ever in 2009. That’s because the new, higher limits (and bonus 50% depreciation) that were first introduced in 2008 have been extended for 2009. This means the limits are almost double from previous (pre 2008) years. Practices are able to write off up to $250,000 of software and related equipment purchased. For practices that can use this tax benefit, this clause functions as a 35% discount off of your purchase price. For instance, if you purchased and installed $50,000 of EMR software and hardware in 2009, you would be able to depreciate, or write off the full $50,000 this year which translates to total cash savings on your purchase of $17,500. It is important to note that the section 179 deduction is re-evaluated annually and may or may not be in effect in future years. Regardless, acting now can signify a substantial tax savings for your practice.
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What will happen if I decide not to implement an EHR?Beginning in 2015, practices that are not “meaningful users” of EHRs will incur the following penalties:
However, the Secretary of HHS can exempt an eligible professional from the payments reductions if the Secretary determines that compliance with the requirement for being a meaningful user would result in a significant hardship for the eligible professional. If by 2018 less than 75% of physicians are meaningful EHR users, then the financial penalties may be reduced 1% up to a maximum 5% reduction.
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What if I have already purchased an EHR and am a “meaningful user”?If you are currently using EHR software in a method considered “meaningful” by the Department of Health and Human Services (HHS), you will be eligible to receive the incentive payments. An eligible professional must submit the following information to CMS in the first payment year, in a manner specified by CMS: name of the eligible professional, National Provider Identifier, business address and phone number, CMS certification number, Taxpayer Identification Number. Registration for both the Medicare and Medicaid incentive programs will occur at one virtual location managed by CMS. Eligible professionals can register starting in January 2011 and attestations may be made starting in April 2011. CMS projects Medicare EHR incentive payments will begin in mid-May 2011.
edgeMED will continue to update its customers on the latest developments of the stimulus plan as they become available. Should you have any questions please do not hesitate to contact us at 800-832-3274.
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