On August 17, 2010, the Centers for Medicare and Medicaid Services (CMS) issued a 4-page letter plus attachments to State Medicaid Directors giving guidance on the implementation of Medicaid EHR incentive programs under the Health Information Technology for Economic and Clinical Health Act (HITECH) and the recently published CMS Final Rule under HITECH.  HITECH mandates that the Federal government provide 100% funding to States for the incentives available to eligible professional and hospitals who participate in HITECH’s Medicaid incentive program, and 90% funding to States for the administration of such Medicaid incentives.  States, however, must qualify for the 90% administrative Federal funding participation (FFP) by:

1. Administering the Medicaid incentive payments to eligible professionals and hospitals;
2. Overseeing the Medicaid incentive program, including tracking “meaningful use” attestations and reporting mechanisms; and
3. Pursuing initiatives that encourage the adoption of certified EHR technology for the promotion of health care quality and the electronic exchange of health information.

Importantly, States must use the HIT Implementation Advance Planning Document (IAPD) in order to request the FFP and must receive approval before implementing proposed activities and services or acquiring equipment. CMS points out that some activities may be more appropriately reimbursed through the existing Medicaid Management Information Systems and that other administrative expenditures may not be eligible for any Federal funding.  States must have a State Medicaid Health Information Technology Plan (SMHP) outlining the State’s current and future HIT landscape and plans for implementation of the Medicaid EHR incentives.  CMS made available a SMHP template for States to outline their Medicaid EHR incentive implementation plans and timeline, referenced here.

The guidance documents CMS included with its letter are: A)  Administering the Medicaid EHR Incentive Program; B) Oversight of the Medicaid Incentive Program; C) Guiding Principles for the Use of the 90% FFP for EHR Promotion; and D) SMHP/IAPD Review Process.   For additional CMS information for states, click here.