Medicaid EMR Stimulus is Voluntary for States

In another great comment from BobbyG (who works for a REC), he talks about the realization that states have the option to opt out of doing the Medicaid part of the EMR stimulus if they want. The following is the full explanation of the discovery and why they’d make such a decision. Plus, it highlights the challenge of understanding all the regulations around the HITECH act.

Here’s just one example of the difficulty you run across. Yesterday we were on a CMS conference call MU incentives presentation in which they said that states’ participation on the Medicaid side was “voluntary.”

We all went “WHAT?! How did we miss that?”

Sure enough: on the CMS website you see “The Medicaid EHR incentive program is voluntarily offered and administered by States and territories. States can start offering their program to eligible professionals (EPs) as early as 2011″

“voluntarily”, “can start”

Not “shall” or “must”.

Now, we knew from the IRF that (paraphrasing here) “there is no statutory basis for the manner via which states disburse incentive payments” but it somehow escaped us that states could simply opt out entirely.

I went back to the ARRA legislation itself (on the assumption that the FR cannot, beyond operational implementation mechanics, mandate additional requirements not in the legislation). Beginning on page 375 you see “Subtitle B—Medicaid Incentives SEC. 4201. MEDICAID PROVIDER HIT ADOPTION AND OPERATION PAYMENTS; IMPLEMENTATION FUNDING.”

You get to page 380 and then only see stuff about the administrative and reporting “requirements” for states getting the “FFP” money (Federal Financial Participation).

And that’s it.

I searched ARRA from beginning to end and found NO explicit wording that states’ Medicaid participation is “voluntary.” You just have to infer it from the Section 4201 language.

What is one potential adverse upshot? Your REC could be signing up a boatload of providers coming in on the Medicaid side, and if your state opts out, well you now have what’s known as “Reputation Risk” writ large (not to mention a torpedo below the waterline in your Ops plan and its milestone payments assumptions).

Why would a state opt out? Because they are only federally funded for 90% of their “reasonable” administrative expenses for the EHR incentive program. They have to find the other 10%. My state (NV) is currently wrestling with a three BILLION dollar budget gap. Similar relative woes exist elsewhere in statehouses (can you say KAHL-EE-FOR-NEEYA?).

You better know where your state stands before recruiting Medicaid providers if you’re a REC or a consultant or VAR, etc.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • When reading legislation, your best bet is to figure that if it isn’t stated explicitly, it’s not required. To me, the language definitely implied expected participation, but it still is technically voluntary. I think the feds are just covering their political bases by acting like the language clearly states that it’s voluntary.

  • Bobby shared this information over at our blog yesterday. While it doesn’t affect our base that much (since our offices don’t deal with a lot of Medicaid patients), it’s one more example of how much we don’t fully know or understand about the HITECH program. I think the heat will really turn up once you start seeing practices and hospitals spending money on certified products and implementation, then applying for the incentives. If there’s some sort of caveat that prevents them from qualifying, I’m sure you’ll hear far more mainstream press voices asking the same sort of questions Bobby and others are raising now. This field is still one that “caveat emptor” is alive and well in.

  • My state (NV) is in the throes of a political mud wresting match over our $3 billion state budget deficit. Our governor has stated he might refuse to accept the just-passed $162 million federal emergency appropriation, $79 million of which is designated for NV Medicaid. (I know, he’s largely posturing, in the view of many. But the GOP Senatorial candidate has characterized the funding as “money laundering for Harry Reid.” It’s getting increasingly ugly and hyper-partisan.)

    Since the state has to cough up 10% of the “reasonable administrative cost”‘ associated with HITECT Act participation, I simply want verification that NV Medicaid IS in fact “in” before I would hustle any more Medicaid provider recruits.

    I found a document on the NV DHHS website yesterday noting that allocation for this is “Not included in the Executive Budget” and where they noted the “significant oversight and reporting requirements which will require state resources as well as a 10% matching requirement for those administrative activities.”

    I’m jus’ sayin’…

  • BobbyG,
    Being a resident of NV myself and having just quit a job working for the state where I was intimately familiar with the NV budget process and some of the politics around it…I’m with you in wondering what NV might do (or not do) with the stimulus money for Medicaid. Definitely worth considering.

  • I truly think practices, and the patients will benefit from EHR and EMR alone. The stimulus might work well but how long will that last? At least there are companies that offer patients electronic personal health record services. I actually spotted one the other day and saw a video about how companies like medefile are doing it. As for th physicians/practices i heard EHR/EMR is going to be required from every one by 2015. That’s a ways down the road. Great article though!

  • I have never understood why Feds and States tax providers’ Medicaid revenues.

    Perhaps there is another way to incentivize EHR/EMR implementation and MU… and in the process increase providers’ interest in seeing Medicaid patients.

    As Bobby said … ‘jus sayin’.

Click here to post a comment