Electronic Health Records

The American Recovery and Reinvestment Act (ARRA) of 2009 established incentive payments for the use of Electronic Health Records (EHRs) by hospitals and physicians, through both the Medicare and Medicaid programs.

To qualify, hospitals must achieve a number of specific capabilities known as “meaningful use.”  Examples include charting patients’ vital signs electronically, and maintaining medication allergy lists. The EHR software used by the hospital must also be approved through a certification process.

Critical Access Hospitals receive an enhanced cost reimbursement for their EHR as their Medicare incentive, and other hospitals get payments based on inpatient volume. The Medicare incentives available to hospitals other than Critical Access Hospitals are typically several million dollars. The Medicaid program’s EHR incentives require similar achievements, and are available to hospitals with at least 10 percent Medicaid patient volume. Unlike most Medicaid expenditures, the EHR incentives are fully paid by the federal government without state participation. The federal government also pays 90 percent of the state’s cost of administering the incentive program.

Since 2015, hospitals and physicians who are not meaningful users of certified EHRs face reduced payments from Medicare.

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