ARRA incentives for hospital EMR adoption

Hospitals that demonstrate meaningful use of an EHR are eligible for Medicare payments of up to $11 million. The formula for calculation of hospital incentives for a 12 month reporting period runs as follows:

• Base payment of $2 million per year in addition to:
• ($200 per inpatient for patients number 1,500 through 23,000) * (Medicare Share) * (Transition factor)

Source: Section 4313, HITECH Act, American Recovery and Reinvestment Act, February 2009.
See: http://www.himss.org/advocacy/d/HIMSS_Summary_AmericanRecoveryReinvestmentAct_2009.pdf

The Medicare share is defined as the ratio of Inpatient Medicare days/Total Inpatient Days.

The Transition factor is 1 in the first year of EHR adoption, .75 in the second year, .5 in the third year and .25 in the fourth year.

See the following link for a calculator of hospital incentives:

http://www.himss.org/EconomicStimulus/calculator/EcoStimulQuest.htm