The Federal Government May Pay You Up To $63,750 Over the Next 5 Years to Use Medical Office Online

UPDATED: 02/07/2011

As you may know, the Final Rule for Meaningful Use requirements was published on July 13, 2010. We have summarized this 864 page document and put it into a format that gets you the information that you need in a quick and easy to read manner. While every effort has been made to make this summary a useful source of information, it does not constitute legal advice and we assume no liability for its accuracy or completeness.


  • CMS – Centers for Medicare and Medicaid Services
  • EP – Eligible Provider
  • EHR – Electronic Health Record
  • ARRA - American Recovery and Reinvestment Act of 2009

Who is this summary for?

We have only included information here that is relevant to the majority of Medical Office Online clients. If you operate in a Hospital, FQHC, RHC, HPSA, MAO, CAH, or ASC, you need to refer to the ruling.

What is Meaningful Use?

Meaningful Use is a list of objectives (see below) set out under the rule that if met, provides incentives for EPs that adopt certified EHR.

Where do the incentives come from?

Incentives are available from Medicare or Medicaid. Funding is authorized by the provisions of ARRA.

Can I receive incentives from both Medicare and Medicaid?

No, you are only permitted to receive incentives from one or the other. You may, however, make a one-time election to switch between the two programs.

Are payments made to the practice or the EP?

Payments are made to the EP as determined by their unique national provider identifier (NPI). Each EP in a practice may qualify for an incentive payment. The payments can be routed to a single entity (a practice for example) at the EP’s option.

Who is eligible for the Medicare EHR Incentive Program?

Under the Medicare EHR Incentive Program, EPs include the following:

  • Doctors of Medicine or Osteopathy
  • Doctors of Dental Surgery or Dental Medicine
  • Doctors of Podiatric Medicine
  • Doctors of Optometry
  • Chiropractors

EPs cannot be “hospital based”, meaning 90% or more of all the EP’s services cannot be furnished in a hospital setting.

Who is eligible for the Medicaid EHR Incentive Program?

Under the Medicaid EHR Incentive Program, EPs include the following:

  • Physicians
  • Dentists
  • Certified nurse-midwives
  • Nurse practitioners
  • Optometrists (at state’s option)
  • Physician assistants (PAs) practicing in a federally qualified health center (FQHC) or rural health center (RHC) that is led by a physician assistant. See the final rule for additional details.

Medicaid EPs must have at least 30 percent of their patient volume attributable to those who are receiving Medicaid. Medicaid Pediatrician EPs must have 20 percent of their patient encounters attributable to Medicaid.

EPs cannot be “hospital based”, meaning 90% or more of all the EP’s services cannot be furnished in a hospital setting.

What are the main differences between the Medicare and Medicaid EHR Incentive Programs?

The Medicare program pays based on your volume of Medicare patients. The Medicaid program pays a fixed amount. The programs have different eligibility requirements (see above).

What are the incentives for the Medicare Program?

The incentive payment amount, subject to an annual limit, is equal to 75 percent of the Secretary’s estimate of the Medicare allowed charges for covered professional services furnished by the EP during the relevant payment year.

For calendar years 2011-2016, meaningful EHR users generally can receive up to $44,000 over 5 years under the Medicare incentive program. Note that to receive the maximum incentive payments for CY 2011, an EP would need to have at least $24,000 in Medicare-allowed charges that year.

What are the incentives for the Medicaid Program?

Qualified EPs will receive $21,250 in the initial year and $8,500 for each of the five additional years.

In the case of pediatricians who qualify based on the lower Medicaid volume standard of 20% (rather than the 30 percent standard), the statutory maximum incentive payment is 2/3 of the standard amount.

If I am eligible for both Medicare and Medicaid Incentives, which should I choose?

Since the standard full amount of Medicaid incentive payments for EPs is greater than the comparable Medicare incentive payments ($63,750 vs. $44,000), most dual Medicare/Medicaid EPs will choose to receive incentive payments through Medicaid.

What technology do I need in order to qualify for incentives?

You need to be using an ARRA Certified EHR.

Is Medical Office Online an ARRA Certified EHR?

Yes, Medical Office Online was certified for meaningful use 2011/2012 on January 28th, 2011 by CCHIT. Please see our certification page for details

What are the Meaningful Use objectives?

The CMS has created a list of:

  • 15 core objectives
  • 10 menu set objectives

Information regarding which objectives are required and when are provided below in the Medicare and Medicaid sections. The below table is summarized for simplicity. See the Final Rule for the full table of objectives and measures.

Core Objectives




30% of patients with at least one med ordered using CPOE

Drug interactions

Drug-drug and drug-allergy interaction checks active and enabled.


40% of all scripts go electronic


50% of all patients seen should have language, gender, race, ethnicity, and DOB recorded

Problem List

80% of all patients seen should have an up-to-date problem list of current and active diagnoses.

Medication List

80% of all patients seen should have an active medication list.

Medication Allergy List

80% of all patients seen should have a medication allergy list

Vital Signs

50% of all patients (age 2+) seen should have vital signs recorded.

Smoking Status

50% of all patients (age 13+) seen should have smoking status recorded

Clinical decision support

Implement one clinical decision support rule

Clinical Quality Measures

Report clinical quality measure summary to CMS showing information such as safe, efficient, patient-centered, equitable, and timely care

Electronic Copy of health information

provide electronic copy of health info to 50% of all patient's requesting it

Electronic Discharge

provide electronic discharge to 50% of all patients requesting it

Clinical Summaries

For 50% of office visits, patient provided with clinical summary

Electronically Exchange key clinical information

Perform one test of EHR’s capacity to electronically exchange key clinical information


Conduct or review a security risk analysis.

Menu Set Objectives



Drug formulary checks

EP has access to drug formularies

Lab Results

40% of all lab results incorporated in EHR as structured data

Clinical Reporting

Generate a report listing patients with a specific condition

Preventive/Follow up care Reminders

20% of all patients (age 65+ or 5-) were sent a reminder

Patient Access

10% of all patients seen provided electronic access to health information (subject to the EP's discretion to withhold certain information)

Patient Education

10% of all patients seen are provided patient specific education resources

Medication Reconciliation

medication reconciliation performed for 50% of patients transitioned

Summary of Care Record

50% of transitions of care and referrals given Summary of Care Record

Immunization Registries

Performed one test of EHR's ability to submit electronic data to immunization registries

Syndromic Surveillance

Performed one test of EHR's ability to submit syndromic surveillance data to public health agencies

How do I prove Meaningful Use to Medicare?


To qualify you must meet the required number (as defined below) of objectives and their associated measures. Note that you may be able to apply for an exemption from certain elements.


To demonstrate meaningful use, CMS will require a one-time attestation after the end of the EHR reporting period involved which will be done through a secure mechanism, such as a secure online portal.

Year 1 (2011):

During the first year, you need to begin meaningful use by October 1 in order to demonstrate meaningful use for 90 days of the calendar year as required. You then must be able to demonstrate meaningful use of all 15 core objectives and 5 menu set objectives with the requirement that at least one selected measure be a population and public health measure. To qualify you must submit information on six measures: three core measures and three others.

Year 2 (2012) – Year 5 (2016)

CMS does not finalize Stage 2 requirements in this final rule but indicates its intent to increase the expectations of the functionalities in Stage 1 and add new objectives for Stage 2.

How do I prove Meaningful Use to Medicaid?

Year 1 (2011):

During the first year you simply need to have engaged in efforts to “adopt, implement, or upgrade certified EHR technology”. If you are already using Medical Office Online, you are good to go. If you are not yet using Medical Office Online, sign up today!

Year 2 (2012) – Year 5 (2016)

You must demonstrate meaningful use for a 90 day reporting period in year 2 and for the entire calendar year in subsequent years. CMS has established identical definitions for meaningful use under Medicare and Medicaid. Though it may vary by state, the process for proving meaningful use for Medicaid will likely be the same as the process described above for Medicare.

What are the important dates?

  • September 27, 2010 - The Final Rule becomes effective
  • January 1, 2011 – First day to begin meaningful use for calendar year 2011.
  • October 1, 2011 – Last day to begin meaningful use to qualify for calendar year 2011 incentive payments. To get the maximum incentive payment, Medicare EPs must begin participation by this date.
  • 2014 – The last year you can begin participation in the incentive program.
  • 2015 – Medicare EPs who do not successfully demonstrate meaningful use will have a payment reduction in their reimbursement (see below).
  • 2016 – The final year of the incentive program.
  • How does Meaningful Use relate to other CMS incentive programs?

    The EHR Incentive Program is separate from other active CMS incentive programs, such as PQRI and the e-Prescribing incentive program. Physicians can participate in PQRI at the same time as the Medicare or Medicaid EHR incentive programs, as long as they meet eligibility requirements for both the PQRI and the applicable EHR incentive program. There are some limitations (see the Final Rule for details).

    What if I don’t participate in the Program?

    For 2015 and later, Medicare eligible professionals who do not successfully demonstrate meaningful use will have a payment reduction in their Medicare reimbursement. The payment reduction starts at 1% and increases up to 5% for every year that a Medicare eligible professional does not demonstrate meaningful use.