Medicaid EMR Stimulus is Voluntary for States

Posted on August 12, 2010 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In another great comment from BobbyG (who works for a REC), he talks about the realization that states have the option to opt out of doing the Medicaid part of the EMR stimulus if they want. The following is the full explanation of the discovery and why they’d make such a decision. Plus, it highlights the challenge of understanding all the regulations around the HITECH act.

Here’s just one example of the difficulty you run across. Yesterday we were on a CMS conference call MU incentives presentation in which they said that states’ participation on the Medicaid side was “voluntary.”

We all went “WHAT?! How did we miss that?”

Sure enough: on the CMS website you see “The Medicaid EHR incentive program is voluntarily offered and administered by States and territories. States can start offering their program to eligible professionals (EPs) as early as 2011″

“voluntarily”, “can start”

Not “shall” or “must”.

Now, we knew from the IRF that (paraphrasing here) “there is no statutory basis for the manner via which states disburse incentive payments” but it somehow escaped us that states could simply opt out entirely.

I went back to the ARRA legislation itself (on the assumption that the FR cannot, beyond operational implementation mechanics, mandate additional requirements not in the legislation). Beginning on page 375 you see “Subtitle B—Medicaid Incentives SEC. 4201. MEDICAID PROVIDER HIT ADOPTION AND OPERATION PAYMENTS; IMPLEMENTATION FUNDING.”

You get to page 380 and then only see stuff about the administrative and reporting “requirements” for states getting the “FFP” money (Federal Financial Participation).

And that’s it.

I searched ARRA from beginning to end and found NO explicit wording that states’ Medicaid participation is “voluntary.” You just have to infer it from the Section 4201 language.

What is one potential adverse upshot? Your REC could be signing up a boatload of providers coming in on the Medicaid side, and if your state opts out, well you now have what’s known as “Reputation Risk” writ large (not to mention a torpedo below the waterline in your Ops plan and its milestone payments assumptions).

Why would a state opt out? Because they are only federally funded for 90% of their “reasonable” administrative expenses for the EHR incentive program. They have to find the other 10%. My state (NV) is currently wrestling with a three BILLION dollar budget gap. Similar relative woes exist elsewhere in statehouses (can you say KAHL-EE-FOR-NEEYA?).

You better know where your state stands before recruiting Medicaid providers if you’re a REC or a consultant or VAR, etc.