Medicaid Incentives for Hospitals (source:  HHS)

The Recovery Act establishes 100 percent Federal Financial Participation (FFP) for States to provide incentive payments to eligible Medicaid providers to purchase, implement, and operate (including support services and training for staff) certified EHR technology.  It also establishes 90 percent FFP for State administrative expenses related to carrying out this provision. 

Incentive Payments to Providers

• Certain classes of Medicaid professionals and hospitals are eligible for incentive payments to encourage the adoption and use of certified EHR technology.  Eligible professionals include physicians, dentists, certified nurse-midwives, nurse practitioners, and physician assistants who are practicing in Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs) led by a physician assistant. 
• Eligible professionals must meet minimum Medicaid patient volume percentages, and must waive rights to duplicative Medicare EHR incentive payments.  Eligible professionals may receive up to 85 percent of the net average allowable costs for certified EHR technology, including support and training (determined on the basis of studies that the Secretary will undertake), up to a maximum level, and incentive payments are available for no more than a 6-year period.  
• Acute care hospitals with at least 10 percent Medicaid patient volume would also be eligible for payments, as would children's hospitals of any patient volume. Entities that promote the adoption of certified EHR technology, as designated by the State, are also eligible to receive incentive payments through arrangements with eligible professionals under certain conditions.

Medicaid Incentive Program Qualifications

To be eligible for incentive payments not associated with the initial adoption/implementation/upgrade of EHR technology, the provider must demonstrate meaningful use of the EHR technology through a means approved by the State and acceptable to the Secretary.  In determining what is “meaningful use,” a State must ensure that populations with unique needs, such as children, are addressed.  A State may also require providers to report clinical quality measures as part of the meaningful use demonstration.  In addition, to the extent specified by the Secretary, the EHR technology must be compatible with State or Federal administrative management systems.

EPs may not receive an incentive under both Medicare and Medicaid in a given year.  CMS and the States will develop means to prevent such duplicate payments.  CMS expects that the prevention of duplicative payments will be addressed more fully through notice and comment rulemaking. 

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