Electronic Health Records in the Medicaid Population

Arlington, Virginia—For the past few years, information technology (IT) initiatives have become a hot topic in the healthcare industry, with advocates pointing out the benefits of using technology to improve care and run more efficient practices. Although progress has been slow, the federal government and states are providing incentives for providers to adopt electronic health records (EHRs) and other IT-related products.

At the Medicaid Managed Care Summit, Sandeep Kapoor, chief technical architect for Kentucky’s Cabinet for Health and Family Services (CHFS), discussed how the state is encouraging healthcare professionals to utilize technology. His presentation was titled Health Information Exchange and Implications of the ARRA Act for Medicaid Programs. Mr. Kapoor said that only 24% of providers in Kentucky have an electronic system, with most saying that adopting EHRs is too expensive. Other issues include a lack of standards for data storage and exchanges as well as concerns regarding privacy and security.

As part of the American Recovery and Reinvestment Act of 2009, the Centers for Medicare & Medicaid Services (CMS) created the Medicare and Medicaid EHR Incentive Programs. Providers, hospitals, and critical access hospitals that adopt and implement certified EHR technology receive incentive payments. State Medicaid agencies administer the program, have oversight authority, and promote EHR adoption and the health information exchange. In implementing the system, states are responsible for data warehouses/repositories, a master patient index, a record locator service, provider outreach materials, a call center, a Web site, staff training on health IT, and audit and verification expenditures.

The incentive program includes 100% in federal funding to providers, whereas states fund 10% of activities related to administration and oversight of the program and 10% of activities and enhancements to the state Medicaid management information systems. Although the rate of utilization of health IT is low in Kentucky, the state has embraced the EHR incentive program. On January 5, Kentucky and Oklahoma became the first states to make payments under the program, with the University of Kentucky Healthcare hospital receiving $2.86 million. According to Mr. Kapoor, the state had paid $15 million in Medicaid incentives to providers as of late February. He estimated Kentucky would make $250 million in incentive payments to approximately 100 hospitals and 2000 professionals.

In Kentucky, eligible professionals include physicians, nurse practitioners, certified nurse midwives, dentists, and physician assistants who practice at a federally qualified health center or rural health clinic that is led by a physician assistant. Acute care hospitals, cancer hospitals, critical access hospitals, and children’s hospitals are also eligible for reimbursements under the EHR incentive program. Eligible professionals who adopt EHRs by 2016 will receive a total reimbursement of $63,750 ($21,250 in the first year and $8500 in each of the next 5 years).

Mr. Kapoor also said Kentucky is building a statewide health information exchange with $4.9 million in initial funding from a CMS Medicaid transformation grant. In August 2009, Kentucky Governor Steve Beshear announced that the CHFS would be responsible for administering the health information exchange, and that Kentucky would receive $9.75 million.