HHS Selects 12 Communities for Medicare EHR Incentive Project

On Tuesday, HHS officials selected 12 states and communities to participate in a five-year Medicare demonstration project that will provide local physicians with financial incentives for using electronic health record systems, Government Health IT reports.

The project is designed to determine whether incentives can encourage small- and medium-sized physician practices to increase their use of EHRs.

Individual physicians could receive up to $58,000 over the five years, while physician practices could receive up to $290,000.

HHS Secretary Mike Leavitt said the project will cost CMS about $150 million if the maximum amount of incentives is distributed (Ferris, Government Health IT, 6/10). However, he added that the demonstration project will be "budget-neutral" because of the savings achieved through care delivery (Monegain, Healthcare IT News, 6/10).

CMS will evaluate the participating physicians on whether they meet the program's benchmarks, and doctors who meet or exceed the benchmarks will be eligible for the highest incentive payments, according to Leavitt.

In the first year, physicians will be judged on how effectively they use EHRs, and in the second year, they will be required to report on national quality measures.

In the final three years, physicians will be evaluated on how they have used EHRs to improve care (DoBias, Modern Healthcare, 6/10). The practices also will be judged on how well they adhere to 26 basic standards developed by the Ambulatory Quality Alliance, according to Kerry Weems, acting administrator of CMS (Healthcare IT News, 6/10).

Selected Communities

Participants in the demonstration project are:

  • Alabama;
  • Delaware;
  • Georgia;
  • Jacksonville, Fla.;
  • Louisiana;
  • Madison, Wis.;
  • Maine;
  • Maryland and Washington, D.C.;
  • Oklahoma;
  • Pittsburgh;
  • South Dakota; and
  • Virginia.

The communities were selected from 30 applicants based on their collaboration with stakeholders, related health IT efforts and their potential for recruiting physicians for the project (AHA News, 6/10).

Participants in Louisiana, Maryland and Washington, D.C., Pittsburgh and South Dakota will begin the project this year, with the other communities following next year.

Each of the selected areas will recruit up to 200 small- and medium-sized physician practices, half of which will be given incentives for using EHRs, while the other half will serve as the control group and will not receive incentives.

The participating practices must use EHR systems approved by the Certification Commission for Health IT to ensure the systems comply with interoperability, functionality and security standards.


In a press release, Leavitt and Weems said that they hope some of the communities that were not selected will initiate their own incentive programs (Government Health IT, 6/10).

Peter Basch, a physician at Medstar Health in Columbia, Md., said, "It's a good start, but compared to what other developed countries are doing, it's a mere fraction."

Ron Sroka -- president-elect of MedChi, Maryland's physician society -- said, "This program reaches just a small group of physicians. We hope it will be offered to everybody."

Leavitt noted that he is working to persuade Congress to provide an additional $50 million to extend the project to 28 other communities (Kohn, Baltimore Sun, 6/11).

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