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What hospitals are eligible to receive Medicaid
incentive payments?
When will the Medicaid incentive payment program
begin for hospitals?
How is the total Medicaid hospital incentive
payment calculated, and how are the payments distributed across payment years?
Answers
What hospitals are eligible to receive Medicaid incentive
payments?
Acute care, children's, and critical access hospitals will be eligible to
receive Medicaid incentives. Acute care hospitals, including critical access
hospitals, must have a Medicaid patient volume of at least 10% (p. 376).
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When will the Medicaid incentive payment program begin for
hospitals?
The Medicaid incentive payment program will begin in January 1, 2011.
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How is the total Medicaid hospital incentive payment
calculated, and how are the payments distributed across payment years?
The hospital Medicaid incentives will be administered by the State. The payment
amount will be determined by calculating an "Overall Hospital EHR
Amount" which is equal to the total of the four payment year amounts using
the Medicare hospital formula and a "Medicare Share" equal to one. The
"Medicaid Share" is calculated using the same method used to calculate
"Medicare Share." The total Medicaid incentive payment amount a
hospital can receive cannot exceed the "Overall Hospital EHR Amount"
multiplied by the "Medicaid Share" of paid inpatient bed days. The
State will likely set a payment schedule, but no annual payment can exceed 50%
of the total calculated Medicaid hospital incentive and payments can't exceed
90% of this total over two consecutive years. Therefore, the full amount of the
total incentive payment cannot be made to a hospital in fewer than three payment
years beginning in 2011, and the full amount could be spread out over a maximum
of six payment years by the State. A hospital cannot receive payments after 2016
unless the hospital received a payment for the previous year. There are no
non-adoption penalties in the Medicaid incentive provision.
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Last Revised: July 12, 2010 | 
