State Medicaid program officials should begin taking the first steps toward getting their programs in shape to provide federal subsidies to physicians and other providers for the purchase of electronic health-record systems under the American Recovery and Reinvestment Act of 2009, according to a CMS advisory letter.
Medicaid programs must prep for federal subsidies
States may immediately request federal matching funds for up to 90% of state expenses for planning on their end of the health information technology subsidy program, according to the Sept. 1 letter from Cindy Mann, director of Medicaid and state operations at the CMS.
To get started, states must submit and receive approval for their “HIT Advance Planning Document” before they initiate planning activities and start spending money, Mann said.
Under the Medicaid provisions of the stimulus law, states will be reimbursed by Medicaid for up to 100% of direct subsidy payments to providers, which can include money for technology, support and staff training. As it does for Medicare, the federal program calls for Medicaid to subsidize providers for up to 85% of cost for these items.
Planning funds also can be used for “participating in statewide efforts to promote interoperability and meaningful use of electronic health records,” the Mann letter said. States will be required to develop a state Medicaid health IT plan outlining how it will integrate the state Medicaid health IT program with other state health IT programs as well as the state's health information exchange road maps.
That said, Mann warned state Medicaid directors that several other contingencies outside of their control must be met before the subsidy payments can commence. Since the stimulus law requires providers to “meaningfully use” EHRs that are “certified,” HHS must first adopt an initial set of standards for meaningful use as well as criteria for EHR certification, both of which remain works in progress.
The federal government also must produce guidelines for state Medicaid programs to use to track providers to ensure they are meeting “meaningful use” standards, Mann said. In addition, Mann said state administrators need to be aware that the law requires subsidized EHRs to be “compatible with state or federal administrative management systems. Therefore, states risk making unallowable incentive payments prior to receiving guidance on how to make these systems compatible.” The CMS will be providing states with additional guidance in this area as time goes on, including a proposed rule for implementing the program, which is expected by the end of this year.
No data was included in the letter on how much money the Medicaid portion of the stimulus law will provide for EHR subsidies.
In a report released in July, released in July, researchers at the George Washington University School of Public Health and Health Services estimated that the Medicaid subsidy program could provide as much as $2.8 billion in EHR subsidies. As many as 45,000 physicians are eligible to receive up to $63,750 each over the six years the program is expected to run, according to the study.
To qualify, physicians must have at least 30% of their patient mix made up of Medicaid patients. Physicians who predominantly practice in federally qualified health centers or rural health clinics will enjoy a somewhat broader criteria for eligibility under the Medicaid program; they need at least 30% of their patients to be considered “needy individuals,” defined as patients who either are covered by Medicaid “or who receive uncompensated care and for whom charges are reduced by the provider on a sliding-scale basis,” the report authors said. Office-based pediatricians, if Medicaid patients make up at least 20% of their patient volume, are eligible to receive a maximum of $42,500.
According to National Ambulatory Medical Care Survey data, the report notes that at least 65% of physicians working in health centers meet the Medicaid 30% patient-volume criterion, but because of the alternate criteria of “needy individuals,” most physicians who practice in health centers will qualify for Medicaid EHR subsidies. According to ambulatory survey data, 10% of office-based physicians see 70% of Medicaid patients.
In comparison, under the Medicare program, where the bulk of the estimated $34 billion in stimulus law EHR subsidies are expected to be made, the maximum stimulus payment for a physician is $44,000 over a five-year period. A Medicare physician “who predominately furnishes services in a federally designated health professional shortage area may receive a 10% incentive premium, bringing the maximum payment under Medicare to $48,400.
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