Federal Incentive Program Fails to Motivate Many Medicaid Providers

Nearly 60 Percent of Florida Providers Ended Participation After First Year   

Florida has distributed roughly $100 million to Medicaid providers that ultimately did not demonstrate they used electronic health records (EHR) in a meaningful way after collecting first-year financial incentives, according to a study by researchers at Florida Atlantic University.

The first-of-its-kind study, published in the ScienceDirect journal, was designed to quantify the rate of provider participation beyond the initial incentive of up to $21,250.

To improve the quality of care and reduce health imbalances in patients receiving Medicaid, the Health Information Technology for Economic and Clinical Health Act began in 2009, encouraging healthcare providers to convert their medical records to an electronic version. The program provides incentive payments for certain providers to use the technology.

After the first-year incentive, providers can earn up to $8,500 annually in the subsequent five years if they attest to Meaningful Use (MU) status, which is using certified EHR or software to boost efficiency, safety and quality of care.

Providers are not required to participate in consecutive years and are not penalized if they do not achieve MU even after collecting the first-year incentive. Many Medicaid providers (57 percent) discontinued participation after collecting their first payment, conservatively totaling approximately $100 million, the researchers said.  

“So about six out of 10 Florida Medicaid providers have basic EHR systems that cannot function in ways that can positively impact patient care,” said Judith P. Monestime, D.B.A., an instructor in FAU’s College of Business and the lead author of the study. “This is concerning because advanced EHR functions – such as Meaningful Use – are necessary precursors to address unmet socioeconomic needs to reduce health disparities. Not meeting these needs leads to higher healthcare costs fueled by a cycle of emergency room readmissions.”

In conducting the study, Monestime, Katherine Freeman, Ph.D., and Pierre K. Alexandre, Ph.D., used 2011-2018 records from the Florida Medicaid Promoting Interoperability program, formerly the Electronic Health Record Incentive program.

“The study was significant for many reasons,” said Alexandre, an associate professor and director of management programs in the College of Business’ Health Administration department. “It tells you that the incentive program, although it had the best of intentions, may not have done enough for certain providers to make it worth continuing in the program.”

Providers often did not continue with the program because the incentive dropped by 40 percent after the first year, and they were not able to continue receiving necessary technical assistance, the researchers said.  

The study found that pediatricians accounted for the largest percentage of providers achieving MU (65 percent) while dentists had the lowest rate (7 percent).

The researchers also noted that 58 percent of providers practicing in rural areas achieved MU compared with 42 percent in urban areas.

“Ultimately, efforts to improve health outcomes, reduce costs, and increase health equity for underserved populations through advanced EHR functions have stalled,” the study stated. “These results may provide timely information on the merits of further legislative efforts to increase MU and promote health information exchange.”

-FAU-