Meaningful Use Facts: Medicare vs. Medicaid

February 11, 2015

Even though the incentives for meaningful use are winding down, each physician must evaluate the costs vs. benefits of implementing an EHR for himself.

The Medicare and Medicaid EHR Incentive Programs ("meaningful use") have been, and continue to be, a hot topic. Early 2015 is an excellent time to revisit some of the details and the differences between the Medicaid and Medicare programs.

The American Recovery and Reinvestment Act of 2009 (ARRA), not Obamacare, provided funding for incentives to promote the adoption and meaningful use of certified EHR technology, as well as penalties for Medicare providers who fail to do so.

1. The Medicaid incentives are more generous than those for Medicare.

• Medicaid maximum incentive per eligible provider (EP): $63,750

• Medicare maximum incentive per EP: $43,720

• The initial Medicare maximum incentive was $44,000.

Beginning in 2013, the incentive payments became subject to the 2 percent reduction for sequestration.

2. The years for incentive participation are different for Medicaid and Medicare EPs.


• Payments are available for a total of six years between 2011 and 2021, inclusive, meaning a Medicaid provider can earn the full incentive payment with participation beginning as late as 2016.

• Meaningful use attestation is only required in year one for EPs who were using an EHR before year one.


Payments are available for a different number of consecutive years depending upon the first year of participation:

Year 1 – 2011, 2012, or 2013: 5 years

Year 1 – 2013: 4 years

Year 1 – 2014: 3 years

Year 1 – 2015 or later: No incentives

• No Medicare meaningful use incentives are available for any reporting period after 2016.

• The deadline to attest to meaningful use for a reporting period beginning October 1, 2014 is February 28, 2015. Although time is short, an EP could still qualify for Medicare incentive payments for 2014, 2015, and 2016.

3. The calculation for incentive payments is different for Medicaid EPs and Medicare EPs.

• The annual Medicaid incentive is 85 percent of the EP's net average allowable EHR costs for the reporting period.

• The annual Medicare incentive is 75 percent of the EP's Medicare allowable charges for covered services during the reporting period.

• Each incentive payment is subject to an annual maximum, depending upon the program (Medicaid or Medicare) and the EP's year of participation.

4. Penalties for non-participation in meaningful use begin for Medicare services rendered in 2015.

• Medicaid payments for services rendered are not subject to penalties related to meaningful use.

• Medicare payments, for services rendered in 2015 and later, are subject to reductions from the physician fee schedule (PFS.) The penalty begins at 1 percent. It can increase annually by 1 percent, up to a maximum of 3 percent, or 5 percent if less than 75 percent of EPs are meaningful users of a certified EHR system.

Even though the incentives for adoption are winding down, meaningful use is here to stay. It is still not a mandate, so each EP must evaluate the costs and benefits of implementing and meaningfully using an EHR for himself.

Here are some examples that may be helpful:

Example 1

An EP successfully attested to meaningful use for the first time by October 1, 2014.

The EP's 2015 Medicare payments will not be subject to the 1 percent reduction.

The EP must attest to or demonstrate meaningful use again by February 28, 2016 to avoid a reduction in 2016 Medicare payments.

Example 2

An EP successfully attested to meaningful use for a 2013 reporting period, making the attestation in either 2013 or 2014.

The EP's Medicare payments will not be subject to the 1 percent reduction in 2015, provided the EP successfully demonstrates meaningful use for 2014 no later than February 28, 2015.

Example 3

As of October 1, 2014, an EP has never demonstrated meaningful use.

Before February 28, 2015, the EP successfully attests to meaningful use in 2014.

The EP's 2015 Medicare payments will be subject to a 1 percent reduction from the PFS.

Example 4

An EP has successfully demonstrated meaningful use for 2013 and 2014. He does not demonstrate meaningful use for 2015.

There will be no reduction in the EP's Medicare payments in 2015, at least for meaningful use.

The will be a 1 percent reduction in the EP's Medicare payments for covered services rendered in 2016.