The Centers for Medicare & Medicaid Services (CMS) is providing guidance for state Medicaid directors and agencies regarding the implementation of CMS’ final regulations to allow the payment of incentives to eligible professionals and hospitals to promote the adoption and meaningful use of certified EHR technology.

In a 19-page letter that includes four enclosures, CMS detailed its expectations relating to the activities and potential uses of the 90/10 matching funds provided by the EHR Incentive Program.

CMS strongly encouraged states to collaborate with other state-level and local partners in the design, development and procurement of systems needed to administer their EHR Incentive Programs. “Doing so would make more effective use of both CMS’ and state’s share of the cost and would shorten the timeline for actually dispersing incentive payments to eligible providers,” the letter stated.

The agency also encouraged states to consider the activities they plan to undertake to administer their EHR Incentive Program and to identify any that may overlap with other federally funded activities, such as provider outreach and development of a Master Patient Index. “Where possible, these activities should be accomplished collaboratively, in which case costs are allocated across partners.”

The organization stated it expects states to implement a risk-based auditing approach to prevent making improper Medicaid EHR incentive payments and to monitor the program for potential fraud, waste and abuse. For 2011, CMS expects, at a minimum, states to focus their auditing resources on:

• Provider eligibility;
• Patient volume;
• Adopt, implement or upgrade (CMS does not anticipate that state will audit meaningful use in 2011); and
• Certified EHR technology.

Recognizing that not all states will implement their programs in the same manner, and each state may face unique barriers to adoption and meaningful use, CMS will consider approval for 90 percent federal financial participation (FFP) for EHR/health information exchange (HIE) promotion initiatives that, among other criterion:

• Serve as a direct accelerant to the success of the states’ Medicaid EHR Incentive Program and facilitate the adoption and meaningful use of certified EHR technology;
• Are consistent with the Officer of the National Coordinator for Health IT (ONC) long-term vision for HIE, and are supportive of the activities prioritized by ONC cooperative agreement funding;
• Are not duplicating meaningful use technical assistance efforts conducted by the ONC-funded regional extension centers, workforce grantees, beacon grantees or other federally-funded projects whose target population is the same;
• Will, to the extent possible, be normalized and integrated into the Medicaid business enterprise;
• Are designed to be well-defined, developmental and time-limited projects; and
• Are distributed equitability across all payers following the fair share principle.

“With the states as our partners, we can leverage the momentum provided by the American Recovery and Reinvestment Act’s EHR incentive programs to ensure that the innovations enabled by technology can support the framework of healthcare reform,” the letter concluded.