Financial Incentives to Adopt an EHR, or How to Claim Your $44,000

Financial Incentives to Adopt an EHR, or How to Claim Your $44,000Most of you have probably heard about “meaningful use” and federal incentives to get going with an electronic health record. But how applicable is this for psychiatrists? And what in the world is “meaningful use” anyway?

Reading this article may or may not make you any wealthier, but it will at least help you to decide whether it is worth the hassle to implement an EHR system.

What is the federal EHR incentive program? Federal financing for EHRs was originally adopted by Congress in 2009 as part of the American Recovery and Reinvestment Act. Starting in early 2011, the federal government began offering financial incentive payments to those who use EHRs for their Medicare and Medicaid patients. And it’s a big chunk of change—up to $44,000 over five years in Medicare incentives and $63,750 in Medicaid incentives over six years for eligible doctors.

How do you know if you are eligible? Basically, you have to meet the following criteria:

  • For the Medicare program, you need to accept Medicare patients (there is no minimum number or percentage), and you must spend less than 90% of your time practicing hospital psychiatry (in an ER or inpatient psych unit).
  • For the Medicaid program, you must have a minimum of 30% Medicaid patients or practice mainly in a federally qualified health center or rural health center and have a minimum of 30% indigent patients.

If you are not already registered for one of these programs, hurry up—the incentives begin to decrease after 2012. However, the Medicare program gives you some breathing room, because in the first year you only have to demonstrate meaningful use for 90 days, so if you start by October 1, 2012, you’ll still be eligible for the maximum payments. Medicaid, however, requires that you use it for the entire year.

For Medicare, which is likely the program that will be used most by psychiatrists, here’s how the money part of it works. Beginning in 2012, you will receive a lump sum incentive payment at the end of each year equal to 75% of whatever you charge Medicare (in addition to your regular Medicare reimbursements). But there’s a cap on payments—$ 18,000 in the first year, which goes down progressively year by year. If you do the math, you’ll see that in the first year you would have to bill at least $24,000 to Medicare to get the maximum incentive of $18,000.

Although this program is completely optional, beginning in 2015, the government will start penalizing you if you do not adopt an EHR. It will do this by skimping on your Medicare reimbursements— beginning with a 1% deduction in 2015 and going up to 5% by 2019. Of course, if only a tiny fraction of your patients have Medicare, this may not matter to you.

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What is “meaningful use?” It’s not enough to just buy some EHR software and start recording patient information. You need to use a program that is “certified” by the Centers for Medicare and Medicaid Services (CMS) and use the product in a way that is defined as “meaningful” to improving patient care. The bottom line is that the government wants to ensure they are getting something in return for the thousands of dollars they will be paying doctors. And what they want in return is some guarantee that you are using your EHR in a way that will improve patient care and improve communication between everyone in the health care system.

To qualify for meaningful use, your EHR has to meet a number of core objectives. Most of them are no-brainers that you will easily meet as long as you buy a certified system.

  • Maintain an up to date problem list/ diagnosis (ie, record your patients’ diagnoses)
  • Maintain an active medication and allergy list
  • Record your patients’ demographics
  • Use your EHR’s drug interaction and drug allergy checking software
  • Use electronic prescribing

But there are also some requirements that may, at first blush, sound difficult for psychiatrists to implement. These requirements reflect the fact that the regulations were written with primary care doctors in mind. However, there are work-arounds that will allow you to comply without breaking too much of a sweat.

  • Record vital signs (height, weight, and blood pressure) for at least 50% of your patients. Some psychiatrists already get this information on all their patients, but most do not. The major work-around is to attest that getting vitals is not relevant to your practice. This is not as ridiculous as it may sound—yes, psychiatrists often need to know vital signs, but they usually obtain the information from patients’ PCPs.
  • Record smoking status in at least 50% of all patients 13 or older. This is easy enough.
  • Provide “clinical summaries” (summaries of their diagnoses and treatments) to at least 50% of patients. Most EHRs make this easy, automatically compiling these summaries so you can print them out. If your EHR has a secure patient portal, you can email the summary, saving you the time it would take to print it out during the visit.
  • Record a number of “clinical quality measures,” such as blood pressure. As a psychiatrist, you are allowed to ignore most of these because you are not a PCP.

How do you know whether an EHR is certified for meaningful use? Ask you EHR vendor or look on the government’s official list here: As is the case with many government programs, the details of the rules surrounding EHRs can get confusing. You can find useful analyses at the American Psychiatric Association website at Medscape has hundreds of articles on EHR topics, ranging from reviews of voice recognition features to current regulatory news (

Financial Incentives to Adopt an EHR, or How to Claim Your $44,000

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This article was published in print 12/2011 in Volume:Issue 9:12.

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APA Reference
Psychiatry Report, T. (2013). Financial Incentives to Adopt an EHR, or How to Claim Your $44,000. Psych Central. Retrieved on August 13, 2020, from


Scientifically Reviewed
Last updated: 2 Oct 2013
Last reviewed: By John M. Grohol, Psy.D. on 2 Oct 2013
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