So how do the payments work? Well, payments are based on – now this is for Medicare – payments are based on 75% of the annual total of allowed Medicare charges paid in the previous year and it's increased by 10% each year as per Medicare guidelines.
In 2011, the maximum incentive payment for Medicare was $18,000. And that's also for Medicare Advantage. Now, maximum total incentive for Medicare is $44,000 over a five-year period. So let's say that you didn't start until 2013. Then you're eligible for $15,000 in 2013 and as it goes on, you're only going to earn $39,000 if you start in 2013. So they dock you for starting late. If you start in 2014, then you would only earn $24,000 as per healthcare rules.
Now, for Medicaid, you can earn up to $63,750. In the first year, 2011, it's $21,250 and you can earn the full bonus - you can get in in any year – 2011, 2012, 2012, 2013, 2014, 2015 or 2016.
You can earn the full bonus with no penalty for Medicaid. And that's why it’s being said that if you're eligible for the Medicaid incentive bonus that you're going to earn more. Now, for Medicare Advantage organization eligible professionals, it works the same as it does with regular Medicare.
Our expert mentioned in an EHR on demand conference that in 2015, for Medicare there's going to be 1% penalty if you don't enroll and participate in electronic health records. 2016, it goes up to 2%. 2017, it goes up to 3%.
Now if it's determined in 2018 and subsequent years that less than 75% of eligible professionals are meaningful users, then the payment adjustment is going to change by one percentage point each year until the payment adjustment reaches 95%.
So eventually, doctors that don't participate, they're going to only earn 5% of the money that they earned through Medicare. They're only going to get paid 5% of it eventually if they don't participate as per Medicare guidelines.
Now for the payment adjustments in 2015, the Recovery Act allows for a hardship exception which, if applicable, could exempt you from the payment adjustment.
This exemption really hasn't been detailed and of course it will be subject to annual renewal. So you would have to renew it each year. But in no case are they going to allow for an exemption to be given for more than five years as per healthcare guidelines.
Now, more information is going to be forthcoming on who qualifies for a hardship exemption and it will be provided in future rule making prior to the 2015 effective date.
The good news is for Medicaid, there's no penalty. There's no payment penalty. So for Medicare, the federal government implements and it's optional nationally.
However, for Medicaid right now, it's only available if your state is participating and has that option. So you may be eligible for both and you may want to do a Medicaid bonus participation but you may not be able to if your state doesn't have the option for you to do that yet, our expert mentioned in an audio conference
Payment reductions begin in 2015 for Medicare as we said. There's none for Medicaid. You have to demonstrate meaningful use for Medicare in the first year. And for Medicaid, you have to adopt, implement or upgrade for first year participation. So the standard isn't quite as high for Medicaid.
The maximum bonus is $44,000 for Medicare; $63,750 for Medicaid. The last year, you can initiate the program, for Medicare it's 2014 and the last year to register is 2016. Payment adjustments begin in 2015. Now, for Medicaid, the last year you can initiate is 2016. The last year to register is the same.
And then for Medicare-only physician hospitals and critical access hospitals, compared to Medicaid, there are five types of eligible professionals – acute care hospitals including critical access hospitals and children's hospitals can participate. Now for registration, you go online to Medicare's website to sign in.
And then there is a Medicare and Medicaid electronic health records webinar for eligible professionals that is available at CMS tutorial videos to ensure healthcare compliance.
Now, the big takeaway here is you don't have to be certified in EHR technology in order to register for the program. Now that means if you think you're going to adopt certified EHR technology, you can go ahead and register.
But you can't earn the bonus until you either for Medicaid adopt, implement or upgrade or for Medicare, successfully demonstrate meaningful use of certified EHR technology.
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