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Feds Issue EHR Medicaid Incentive Guidance


The Centers for Medicaid and Medicaid Services has sent a letter to all state Medicaid directors to provide initial guidance on upcoming Medicaid EHR incentive payments. Under the American Recovery and Reinvestment Act, hospitals and physicians that treat a qualifying number of Medicaid patients can apply for incentive payments based on their meaningful use of electronic health records.

The letter points out that states may immediately apply for federal funds to pay for 90% of administrative planning activities. It spells out criteria to receive the funding.

"This letter, including the enclosures, will provide preliminary guidance on state expenses related to activities in support of the administration of incentive payments to providers," CMS states. "More information will be forthcoming through guidance and rulemaking regarding state administrative expenses and provider incentive payments. We intend to published proposed regulations to address the steps outlined in this letter by the end of the year."

Other points of interest in the letter include:

  • States should coordinate activities with their CMS regional office to reduce confusion of the Medicare and Medicaid incentive programs and maximize the ability to advance health I.T.;
  • States should view Medicaid planning activities as part of larger evolving state health I.T. efforts; and
  • States must settle a range of issues before they can begin making incentive payments. For instance, providers using certified EHRs are not eligible for Medicaid incentive payments unless the EHR is 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 letter and accompanying documents are available at

This article can also be found at

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