State Medicaid agencies will be able to obtain 90 percent federal financial participation (FFP) for their administrative activities in planning and preparing for the program for incentive payments to practitioners who adopt and use health information technology (HIT), including electronic health records (EHR). The incentive program, which was authorized by the American Recovery and Reinvestment Act (ARRA) (PubLNo111-5) will reimburse states for 100 percent of their payments to providers who adopt, buy and make meaningful use of EHR. State payments to providers must be limited to the 85 percent of the net average allowable cost, as determined by CMS, of certified EHR technology.
Planning the planning process
To receive FFP for planning for the incentive program, states must submit a HIT Planning Advance Planning Document for CMS approval. State agencies are encouraged to work closely with their regional office of CMS to be sure that the activities will qualify for reimbursement. The purposes of reimbursable planning activities may include administering the incentive payments to providers, ensuring proper payments, auditing and monitoring of payments, and participating in statewide efforts to promote interoperability and meaningful use of EHR. Because incentive payments are available under both Medicare and Medicaid, the agencies will need to plan for prevention of duplicate payments.
Upcoming steps
The incentive payments will be available for adoption and implementation of certified technology. Before any technology or systems can be certified, the HHS Secretary will have to adopt standards for certification; adoption may be done by interim final rule. Because incentive payments are available only for technology that meets interoperability requirements, states will need to be sure that the systems they pay incentives for are compatible with state or federal administrative management systems. Therefore, CMS recommends that they wait until they receive guidance on how to make the systems compatible.
CMS also must develop and adopt standards for implementation and meaningful use of the technology and requirements for state tracking. States, in turn, will need to plan to ensure that they can track in accordance with the federal rules.
After CMS approves a state's advance planning document, the state must develop a Medicaid HIT Plan (SMHP) describing the state’s Medicaid incentive program and how it will integrate current and planned Medicaid HIT assets and fit within the larger state HIT roadmap.
CMS anticipates publication of a proposed rule to implement the program by the end of 2009.
CMS Letter to State Medicaid Directors, No. SMDL-09-006, Sept. 1, 2009, ¶53,123
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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