What Are the Different Types of EHR Incentives?

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  • Written By: L.S. Ware
  • Edited By: Melissa Wiley
  • Last Modified Date: 08 October 2019
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The United States government has initiated various programs to prompt hospitals and physicians to adopt electronic health records (EHR) and move away from a paper-based record system. In 2009, the American Recovery and Reinvestment Act (ARRA) was signed earmarking billions of US dollars for EHR incentives. Prior to ARRA, a number of smaller EHR incentives, such as electronic prescribing (eRx), had been developed to make an early transition to electronic methods more appealing to medical practitioners and facilities. Under ARRA, the two types of EHR incentives are the Medicare Incentive Program and the Medicaid Incentive Program.

Registration for the Medicare and Medicaid EHR incentives began in January 2011. The US federal government implements the Medicare program, while the Medicaid program is state-implemented and voluntary, meaning it may not be available in every state. The last year to register for the EHR incentives is 2016.

In order to qualify for monies under either of these programs, an eligible professional (EP) must have or implement a certified EHR and use the technology in a meaningful fashion. Meaningful use (MU) is defined by the Centers for Medicare and Medicaid Services through a series of measures and criteria. Additional MU criteria may be imposed by individual states for the Medicaid EHR incentives. An EP can qualify for only one program, but may switch once before 2015.


EPs who register for the Medicare program must demonstrate MU within the first year. The most an EP can receive throughout the Medicare program is $44,000 US Dollars (USD). This includes a $3,000 USD bonus for providers who register and meet MU in 2011 or 2012. The amount of yearly payment is calculated as 75 percent of Medicare Part B billings. Providers in a health professional shortage area (HPSA) receive an additional 10 percent incentive payment. Physicians, subsection (d) hospitals, and critical area hospitals (CAH) may seek EHR incentives under Medicare.

First-year participation in the Medicaid program requires only adopting, implementing, or upgrading to certified EHR technology. MU demonstration is required in the second year of participation. EPs can receive up to $63,750 USD over the course of six years. Acute care and children's hospitals may seek EHR incentives under Medicaid, but their payments will be based on a $2 million USD base, among other factors.

For a provider, the payment is calculated as 85 percent of the total EHR cost, including related fees like training and implementation. In addition to physicians, there are five types of EPs who may qualify for Medicaid EHR incentives, including physician assistance in specific instances. To qualify under the Medicaid provision, an EP must have a minimum of 30 percent of his or her claims attributable to Medicaid. This minimum number is reduced to 20 percent, and the maximum payment is reduced by one-third for pediatricians.


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