In the first of two recent developments related to electronic health record (EHR) incentives, CMS announced via an e-mail notification that it would begin paying Medicare EHR incentives to eligible professionals and hospitals within a week (see Modern Healthcare, CMS to Issue First Medicare EHR Incentive Payments This Week, available here). According to Modern Healthcare, CMS also explained in the notification that eligible professionals can expect to receive payments based on 75 percent of their total Medicare allowed charges submitted no later than February 2012, and reminded providers that a payment incentive contractor—rather than the Medicare administrative contractors—would make the incentive payments.

In a second development, CMS issued a May 18, 2011 letter to state Medicaid directors providing additional guidance on qualifying for enhanced federal funding for administrative expenses related to the Medicaid EHR incentive program. The American Recovery and Reinvestment Act provides for 100 percent federal financial participation (FFP) for incentive payments to eligible Medicaid providers to adopt, implement, upgrade and meaningfully use certified EHR technology through 2021, and 90 percent FFP for state administrative expenses related to the program. Specifically, the May 18 letter provides further detail on criteria that health information exchange (HIE) promotion activities: (1) equitably divide costs across payers based on the “fair share principle,” (2) leverage efficiencies with other federal HIE funding, and (3) are developmental and time-limited. CMS previously issued a letter on August 17, 2010, that provided guidance to states on allowable administrative expenses for activities supporting Medicaid EHR incentive program administration and provided initial direction on the role of state Medicaid agencies in promoting EHR adoption and HIE exchanges. For a copy of the May 18, 2011, letter, click here. For a copy of the August 17, 2010 letter, click here.