The Centers for Medicare & Medicaid Services have provided state Medicaid directors with the federal government’s expectations while implementing the medical portion of the EMR incentive program.

According to the incentive program, the eligible physician fulfilling the criteria of “meaningful use” will be provided with the full cost of Medicaid bonuses and 90% of the state’s administrative expenses. There was, however, confusion about the latter part; as a result, CMS issued further regulations of the incentive program on August 17th, 2010.

The regulations listed three requirements for states to be entitled to the 90% administrative expenses:

  • Administering Medicaid incentive payments to eligible physicians and hospitals
  • Routine tracking of meaningful use reporting and other oversight activities
  • Pursuing initiatives that will encourage the adoption of certified EMR technology for the promotion of healthcare quality

“CMS expects that states will take an incremental approach to the initial implementation of their Medicaid EMR incentive programs, for example states may begin by focusing on provider outreach and registration, then on provider attestation and verification of eligibility, next on provider payments, and finally on capturing meaningful use data,” wrote Cindy Mann, director of the Center for Medicaid and State Operations, in the letter to state Medicaid directors.

The Centers for Medicare & Medicaid Services expect states to implement audit programs for assistance in preventing them from making improper Medicaid bonus payments. States may be given improved federal matching funds for auditing activities focused on enrollment, license verification, sanctions, data analysis, and privacy and security. The document also urges the state Medicaid directors to look for ways to save money and avoid duplication as they administer their healthcare IT programs.

CMS strongly encourages states to work together with other state-level and local partners for the designing, development, and procurement of systems needed to manage their EMR incentive programs. By doing so they would make more effective use of both CMS’ and States’ share of the cost and will condense the time line for actually dispersing incentive payments to eligible providers. CMS is available to offer technical support to states interested in exploring collaborative approaches and will disseminate information on approved and successful models.

“With the states as our partners, we can leverage the momentum provided by the American Recovery and Reinvestment Act’s EMR incentive programs to ensure that the innovations enabled by technology can support the framework of healthcare reform,” the letter concluded.