Both the Medicare and Medicaid EHR incentive programs for hospitals are based on a Federal fiscal year. The amount of the incentives for each year is based on a number of factors, beginning with a $2 million base payment. The incentives are provided to the hospital, rather than the individual, as in the EHR incentive program for eligible professionals.

Medicare

There are three types of eligible hospitals for the Medicare EHR incentive program

• "Subsection (d) hospitals" in the 50 states or DC that are paid under the hospital inpatient prospective payment system;

• Critical Access Hospitals (CAHs); and

• Medicare Advantage (MA) Hospitals



Hospitals will qualify for incentive payments if they demonstrate meaningful use of certified EHR technology.

Medicare hospitals, Critical Access Hospitals, and Medicare Advantage-affiliated eligible hospitals that adopt a certified EHR system and are meaningful users can begin receiving incentive payments in any year from FY 2011 to FY 2015. The law defines a payment year in terms of Federal fiscal year beginning with FY 2011. However, a hospital does not have to begin receiving incentive payments in FY 2011. Hospitals can begin receiving payments in any year from FY 2011 to FY 2015, but the incentive payment will decrease for hospitals that start receiving payments in 2014 and later. Hospitals that are not meaningful users of certified EHR technology beginning in FY 2015 will be subject to payment adjustments.

Meaningful use requirements are still grouped into three stages but the designations are no longer tied to dates (2011, 2013 and 2015): In Stage 1, the focus is on capturing data, in Stage 2 on reporting health information and tracking key clinical conditions, and in Stage 3 on improving performance and health outcomes. The notice of proposed rulemaking released on December 30 details only Stage 1 requirements, but provides some commentary on what will be included in Stage 2.



Medicaid

Acute care hospitals (including Critical Access Hospitals) with at least 10% Medicaid patient volume, as well as children's hospitals (no Medicaid volume requirements) may be eligible for Medicaid EHR incentive payments.

Medicaid hospitals that qualify for EHR incentive payments may begin receiving incentive payments in any year from FY 2011 to FY 2016. While the law defines a payment year in terms of a Federal fiscal year beginning with FY 2011, a hospital does not have to begin receiving incentive payments in FY 2011.



NOTE: Some hospitals may receive incentive payments from both Medicare and Medicaid if they meet all eligibility criteria.