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Stage 2 Rule Eases Burdens on Medicaid Providers

Posted in Behavioral Health, Meaningful Use, Rulemaking

The Centers for Medicare and Medicaid Services (“CMS”) Medicare and Medicaid EHR Incentive Programs Stage 2 final rule (“Final Rule”) made two key changes which should benefit providers seeking Medicaid incentive payments:  (1) allowing more patient encounters to be included in satisfying the required patient volume threshold for eligible professionals; and (2) simplifying hospital reporting of discharges.  This post is the third in our multi-part series exploring various issues related to the Final Rule.  In case you missed them, here is our first, and here is our second.

Patient Volume Calculation

Stage 1 Rule:  Previously, not all encounters with Medicaid-eligible patients counted towards satisfying the required minimum patient volume threshold.  In order for an encounter to be included, Medicaid must have paid for either (1) all or part of the service; or (2) all or part of the premium, deductible, or coinsurance of the encounter.

Stage 2 Rule:  The Final Rule expands the two options in the Stage 1 Rule to include those encounters for which the patient is simply enrolled in the State’s Medicaid program at the time of service.

Impact:  All eligible professionals, regardless of the stage of the incentive program in which they are participating, can benefit from this development.  This change makes it easier for providers to meet the applicable patient volume threshold, which is generally 30% of all encounters (subject to certain specific exceptions, e.g., pediatricians).  Providers of behavioral health services, for example, which serve Medicaid-eligible patients who, for privacy or other reasons, do not wish to have Medicaid billed, may include these encounters.  Were reimbursement to be denied (for reasons other than Medicaid ineligibility), providers will not be required to exclude these encounters from their calculations.

Hospital Base Year

Stage 1 Rule:  The calculation for the hospital incentive amount has been based on the number of discharges in a 12-month period, selected by the State, ending in the Federal fiscal year before the hospital’s fiscal year that serves as the first payment year.

Stage 2 Rule:  The Final Rule simplifies the base year designation, allowing hospitals to use the most recent, continuous 12-month period for which data are available prior to the payment year.

Impact:  Hospitals that begin participation in the program starting in Federal fiscal year 2013 or subsequent fiscal years may use the new base year designation.  By simplifying the base year designation, CMS hopes to encourage timely participation in the program by limiting how far back the hospitals need to look when calculating the number of discharges.