Bonus Payments for EHR Use Reach Record Level

Susan Jaffe

June 25, 2012

June 25, 2012 (Washington, DC) — The number of physicians and other healthcare providers receiving Medicare and Medicaid bonus payments for adopting electronic health records (EHRs) nearly doubled in the last 3 months to more than 110,000, officials at the US Centers for Medicare and Medicaid Services (CMS) said this week.

In a blog post earlier this year, CMS Acting Administrator Marylyn Tavenner and National Coordinator for Health Information Technology Farzad Mostashari, MD, set a goal of enrolling 100,000 healthcare providers in the bonus program by the end of this year. That goal was exceeded 7 months ahead of schedule, they said in a news release last week.

"Meeting this goal so early in the year is a testament to the commitment of everyone who has worked hard to meet the challenges of integrating EHRs and health information technology into clinical practice," said Tavenner.

Some 59,000 physicians and other providers and 2000 hospitals had earned bonuses at the time of the blog post from March. By the end of May, the number receiving bonuses jumped 86% to 110,347 physicians and other healthcare providers, and 20% to 2438 hospitals.

According to CMS data obtained by Medscape Medical News, $5.76 billion in incentive payments has been distributed to physicians, hospitals, and other healthcare providers since the program began in 2011 through the end of May. More than half of the total funds distributed so far ($3.72 billion) have gone to hospitals.

Table. Electronic Health Record Incentive Payments to Medicare and Medicaid Providers, January 2011 Through May 2012

Healthcare Providers Number Amount Paid
Medicare-eligible professionals 58,530 $994,993,305
 Doctors of Medicine or Osteopathy 51,879 $887,440,570
 Dentists 49 $754,280
 Optometrists 2394 $37,565,687
 Podiatrists 2955 $52,660,968
 Chiropractors 1253 $16,571,799
Medicaid-eligible professionals 40,700 $851,916,194
 Physicians 30,348 $633,202,441
 Certified nurse-midwives 893 $18,887,000
 Dentists 2243 $47,481,000
 Nurse practitioners 6865 $145,014,503
 Physicians assistants 351 $7,331,250
Eligible hospitals 3150 $3,724,679,098
 Medicare only 89 $133,465,561
 Medicare/Medicaid (Medicare payment) 958 $1,753,110,807
 Medicaid only 60 $137,147,376
 Medicare/Medicaid (Medicaid payment) 2043 $1,700,955,354
Medicare advantage organizations for eligible professionals 11,117 $189,436,486
Total 113,497 $5,761,025,083

Source: US Centers for Medicare and Medicaid Services

Hospitals have the highest participation rate in the incentive program, with nearly of half of the 5011 eligible hospitals receiving an average incentive payment of $850,000.

Among physicians, dentists, and other healthcare providers, doctors of medicine or osteopathy are the largest group receiving the bonus payment, whereas dentists have the lowest participation.

The dramatic increase in incentive payments during the past 3 months was the result of an influx of applications from physicians and other healthcare providers submitted early this year, including 11,117 who work for Medicare Advantage plans, CMS spokesman Don McLeod told Medscape Medical News.

The incentive program, created by the Health Information for Clinical and Economic Health Act of 2009 (HITECH), began last year to encourage physicians, hospitals, and other healthcare providers to adopt or upgrade certified electronic health systems.

To earn the bonus, providers also have to demonstrate that the systems are used in ways that meet certain "meaningful use" criteria. For example, Medicare providers have to use the systems to maintain current medication lists for 80% of their patients, and they must order 40% of prescriptions electronically. HITECH also provided funds for technical support, workforce training, an electronic records system certification process for record systems, and other assistance.

The rapid growth in participation still represents only about 20% of the 521,600 physicians and other healthcare providers eligible for the incentive payments. For providers who treat Medicare patients, this is the last year to apply and receive the full incentive payment of $44,000, which is phased in each year and ends in 2016.

The maximum Medicaid incentive payment is $63,750; that program ends in 2021.

Medicare providers who do not show meaningful use of EHRs will be penalized by having their Medicare reimbursements reduced by 1% starting in 2015, said McLeod. The deduction rises to 5% in 2019.

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