CareTech News

MU: Understanding the Timing and Calculations for Incentive Payments 07/29/14

 July 2014 
Meaningful Use Update – Understanding the Timing and Calculations for Incentive Payments
Understanding Stimulus Incentives
Recent changes to the timing for hospitals and providers to comply with Meaningful Use requirements reinforce the notion that healthcare organizations must regularly review and understand how updates to the American Recovery and Reinvestment Act of 2009 HITECH rule affect them.  
The U.S. healthcare industry has made significant progress toward implementing Electronic Health Records (EHRs). Since the program began in 2011, more than 370,000 hospitals and professionals nationwide have received an incentive payment. Much of the success can be attributed to diligent planning that includes understanding the specifications as well as the required timing. An ongoing challenge that organizations will continue to encounter revolves around the many options and differences in the rule that are based upon your organization’s unique environment.  
Although there are many similarities, major differences in the rule exist for individual hospitals and eligible providers, including the stimulus payment schedule and calculation, fiscal verses calendar year timing, penalty schedule and calculation, and patient mix. Additional factors that can affect your schedule include eligible organization type (acute care, critical access hospitals or eligible professional), the vendor’s delivery of certified software and the date that you first attested.  
There have been few changes in the timing and calculations for incentive payments, however calculations of the stimulus amounts may vary each year based upon a number of factors, including when you first attested, the selection of Medicare or Medicaid and eligible organization type (acute care hospital, critical access hospital or eligible provider). Major factors affecting eligible organizations:  
  • Acute care hospital payments include the Medicare or Medicaid share, number of discharges and revenue for each year.
  • Critical access stimulus amount factors include the cost of EHR technology and past year discharges. Ambulatory provider calculations consider patient charges toward the maximum set annual stimulus amounts.
What to know:  
“Stimulus incentives timing and amounts vary based upon whether you select Medicare, Medicaid, or both.”  

Jim Deren
Healthcare IT Planning Specialist
CareTech Solutions

  • Stimulus payments are spread over four consecutive years for hospitals requiring achievement of successful attestation for each consecutive year in order to receive maximum incentives.
  • The total stimulus money is reduced by a percentage each subsequent year.
  • In order to receive full incentives, hospitals must have attested for the four consecutive years beginning no later than 2013.
  • Hospitals that first attest after 2013 will have reduced payments and reduced number of years of incentives.
  • Critical Access Hospitals (CAHs) may only receive Medicare stimulus incentives through FY2015. Subsection D hospitals’ stimulus incentives can be received through FY2016.
  • Eligible provider stimulus payments are spread over five years for Medicare and six years for Medicaid programs.
  • Medicare stimulus incentives are reduced for those first attesting after calendar year 2012.
  • The Medicaid fee schedule provides a full six years of payments for those who first attest no later than 2016.
Upcoming Meaningful Use topic: Payment Adjustments

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