EHR, Meaningful Use & Penalties

The Medicare Electronic Health Records (EHR) Incentive Program for eligible professionals started in 2011 and will continue through 2016. Depending on the first year of participation, eligible professionals can participate for up to five years throughout the duration of the program.The last year to begin participation in the Medicare EHR Incentive Program is 2014.

To qualify for Medicare EHR incentive payments, Medicare-eligible professionals must successfully demonstrate “meaningful use” for each year of participation in the program. The American Recovery and Reinvestment Act of 2009 specifies three main components of meaningful use:

  1. The use of a certified EHR in a meaningful manner, such as e-prescribing.
  2. The use of certified EHR technology for electronic exchange of health information to improve quality of health care.
  3. The use of certified EHR technology to submit clinical quality and other measures.


Simply, “meaningful use” means providers need to show they’re using certified EHR technology in ways that can be measured significantly in quality and in quantity.

The criteria for meaningful use will be set forth in three steps over five years.

  • Stage 1 (2011 and 2012) sets the baseline for electronic data capture and information sharing.
  • Stage 2 (to be implemented in 2013) and Stage 3 (to be implemented in 2015) will continue to expand on this baseline and be developed through future rule making.

Incentive payments are made based on the calendar year. The reporting period for the first year is any 90 continuous days during the calendar year. The reporting period for all subsequent years is the entire calendar year.

For calendar years 2011–2016, eligible professionals who demonstrate meaningful use of certified EHR technology can receive up to $44,000 over five years under the Medicare EHR Incentive Program. To receive the maximum EHR incentive payment, Medicare-eligible professionals must begin participation by 2012.

It is important to note the penalty provision for 2015 and later: Medicareeligible professionals who do not successfully demonstrate meaningful use will have a negative payment adjustment made to their Medicare reimbursement.The payment reduction starts at 1 percent and increases each year that a Medicareeligible professional does not demonstrate meaningful use, to a maximum of 5 percent.

Medicare-eligible professionals who also qualify as Medicaid-eligible professionals must choose between the Medicare and Medicaid incentive programs when they register.

The Centers for Medicare and Medicaid Services (CMS) in May issued the first Medicare incentive checks for meaningful use of EHR. The maximum first-year incentive payment for eligible professionals is $18,000. Providers receiving meaningful- use incentives will be paid the same way they receive payment for Medicare services, through either an electronic funds transfer or a paper check.

For more information about the Medicare EHR program, visit www.acatoday. org/ehr. If you have any questions about this program, contact gr@acatoday.org.