Medicare Faqs

How Does Medicare Incentivize Physicians to Use Electronic Health Records?
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Medicare Electronic Health Record (EHR) incentive programs reward health care providers financially for “meaningful use” of EHR technology to provide efficient care. According to the Health Information Technology for Economic and Clinical Health Act (which was part of the American Recovery and Reinvestment Act of 2009, and which authorizes the Centers for Medicare & Medicaid Services (CMS) to provide incentive payments for EHR meaningful use to health care providers), meaningful use comprises three main elements: using certified EHRs, such as for e-prescribing; using EHR technology for the electronic exchange of health information to improve quality of care; and using EHR technology to submit clinical quality measures to the CMS. Providers must use EHR technology in a manner that can be significantly measured in quality and quantity.

In order to receive Medicare EHR incentive payments, health care providers must adopt (that is, install EHR technology), implement (begin using the technology), upgrade (expand existing technology to meet requirements) or demonstrate meaningful use during their first year of participation in the incentive program. After that, they must demonstrate continued meaningful use of certified EHR technology on an annual basis.

The CMS is in the process of developing meaningful use criteria over a period of five years. Stage 1, in 2011 and 2012, sets the baseline for electronic data capture and information sharing. The CMS will continue to expand on the baseline criteria in Stage 2 (to be implemented in October 2013 for hospitals and January 2014 for physicians) and Stage 3 (to be implemented in 2015).

To meet meaningful use requirements and qualify for an incentive payment during Stage 1, doctors must achieve 20 out of 25 meaningful use objectives. There are 15 required core objectives, and participants can choose the remaining five from a list of 10 menu set objectives. Core set objectives include activities such as providing patients with an electronic copy of their health information and protecting electronic health information. Menu set objectives include items such as implementing drug-formulary checks and incorporating clinical lab test results into EHR technology as structured data, which stores information in a format that makes it easy to retrieve, transfer and reference to aid patient care.

Hospitals seeking incentive payments must meet 19 out of 24 meaningful use objectives. Eligible hospitals must achieve 14 required core objectives, such as providing patients with an electronic copy of their discharge instructions upon request. Hospitals also need to choose five menu set objectives, such as recording advance directives for patients age 65 and older.

Along with meeting those requirements, eligible participants must report clinical quality measures before they can receive EHR incentive payments. Eligible physicians are required to report on a total of six quality measures: three core required measures and three additional measures. Clinical quality measures for professionals include child immunization status, adult weight screening and follow-up, and weight assessment and counseling for children and adolescents. Eligible hospitals must report on 15 clinical quality measures, in addition to the 14 required core objectives mentioned above. Hospital clinical quality measures include emergency department throughput (admitted patients’ median time from emergency department arrival to departure) and venous thromboembolism (VTE) discharge instructions.

For eligible physicians, payments are made about four to eight weeks after the physician proves meaningful use of the technology. Physicians will not receive incentive payments within that time frame if they have not met the $24,000 threshold in allowed charges for the calendar year, which means payments for meaningful use are sometimes weighted toward the end of the year.

Program participants can refer to Meaningful Use Objectives specification sheets for eligible professionals and hospitals for information on how to qualify for incentive payments.

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