ARRA Incentives

ICANotes and the HITECH Act Incentive Programs– How can these programs benefit you?

The HITECH (Health Information Technology for Economic and Clinical Health) act was created to promote the adoption of EHRs as well as  other Health Information and Technology programs as part of the American Recovery and Reinvestment Act (ARRA) passed in 2009.

Through the HITECH act, incentive programs for Medicare and Medicaid providers were established. To qualify to receive this incentive funding, eligible professionals must treat Medicare and/or Medicaid patients through “meaningful use” of a "qualified EHR system."  Although the Medicare incentive program started in 2011 and extends until 2016, physicians must have and use an EHR by 2014 to participate in the Medicare incentive program.  The Medicaid incentive program has different eligibility and requirements. The eligibility for Medicare and Medicaid programs differs as do the dates of the program details and maximum incentives. 

CMS (the Centers for Medicare and Medicaid Services) is responsible for documentation of both of these Meaningful Use incentive programs and CMS administers the Medicare incentive program while individual states administer the Medicaid incentive program. There are no Medicaid payment reductions scheduled. The maximum incentive for Medicaid is $ 63,750 for Eligible Professionals. It is up to each state to decide whether or not to implement Meaningful Use for Medicaid and registration is done through the state.

The first year of participation in Meaningful Use is 90 days. Subsequent years are 365 days except for 2014 when all providers only participate in Meaningful Use for 90 days. Currently Meaningful Use is broken down into Stage 1 and Stage 2.  Details about Meaningful Use Stage 1 and Stage 2 are at:

Stage 2 is set to begin in 2014, however, no date has been set for Stage 3. A provider must attest successfully for 2 years to Stage 1 before attesting to Stage 2.

The incentive payments may be increased by 10% if physicians predominantly furnish services in an area designated by the Secretary as a health shortage area. Generally, hospital-based Physicians are not eligible for the incentives and bonuses.

Calendar Year Maximum Incentive Payments based on the First CY in which an EP participates in the Program

If an Eligible Professional does not begin to demonstrate Meaningful Use for Medicare patients by 2014, payment adjustments (penalties) will be as follows:

  • 2015 – 1 % reduction of Medicare covered amount
  • 2016 – 2 % reduction of Medicare covered amount
  • 2017 and following – 3 % reduction of covered amount

For full details of the Meaningful Use Medicare payment adjustment, see this CMS document.

A thorough explanation of these Medicare or Medicaid incentive programs is at this CMS page.  For assistance in the Incentive Programs, the EHR Information Center Help Desk can be reached at 888-734-6433 Monday – Friday 8:30 am – 4:30 pm in all time zones.

PQRS (Physician Quality Reporting System) is another incentive program available for Medicare providers. A provider can participate in both Meaningful Use and PQRS or only one of those programs. PQRS details and eligibility are at the PQRS page of CMS.


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