Incentive Payment Amounts

Eligible Professionals

The majority of Eligible Professionals will receive an incentive payment equal to the statutory limit (established by the HITECH Act) of 85% of the Net Average Allowable Cost (NAAC) of adopting the EHR technology and achieving meaningful use. Under the HITECH Act, the Secretary of Health and Human Services was directed to conduct a study of the average cost of adopting and meaningfully using EHR technology, as well as the average amount of financial assistance received by providers from outside sources. The Secretary conducted these studies and determined that the net cost to providers would be at least as much as the statutory maximum NAAC of $25,000 in the first year and $10,000 for each subsequent year; consequently, the incentive payment amount is set at 85% of these values.

Participation Year Incentive Payment Amount
Year 1 $21,250
Year 2 $8,500
Year 3 $8,500
Year 4 $8,500
Year 5 $8,500
Year 6 $8,500
Total $63,750


According to the HITECH Act, pediatricians are eligible to participate in the Medicaid EHR Incentive program at either of two levels. If they can meet the eligibility criteria that apply to all EPs (including the minimum 30% Medicaid patient volume), they can receive the standard incentive payment amounts listed above. However, if they can demonstrate at least 20% Medicaid patient volume (as well as meeting the remaining eligibility criteria) but fall short of the 30% Medicaid patient volume threshold, they qualify for a reduced incentive payment equal to 2/3 the standard EP amount.

Participation Year Incentive Payment Amount
Year 1 $14,167
Year 2 $5,667
Year 3 $5,667
Year 4 $5,667
Year 5 $5,667
Year 6 $5,665
Total $42,500

A "pediatrician" is a physician (M.D. or D.O.) who meets all other criteria for eligibility in the program and additionally satisfies at least one of the following:

  • The practitioner is board-certified in General Pediatrics or a pediatric subspecialty by either the American Board of Pediatrics (ABP) or the American Osteopathic Board of Pediatrics (AOBP). This certification must be current and in good standing during the entire patient volume reporting period, at the time of attestation, and at the time of each incentive payment, or
  • The practitioner focuses on treating patients 18 years old and younger, and demonstrates that the majority of care is provided to patients 18 years old and younger.

Eligible Hospitals

The formula for determining the incentive payment amount for a given hospital is defined in the HITECH Act as a sum over four years of an annual incentive amount which is based on the estimated number of discharges for each year and the proportion of overall bed-days within the hospital that are attributable to Medicaid beneficiaries.

Although the statutory method for calculating the incentive payment amount is expressed as a sum of four annual payments, the actual disbursement schedule of the total incentive amount is left to the States, subject to the restrictions that the total amount may be distributed over no less than three years and no more than six years, and that no single year may account for more than 50% or two years account for more than 90% of the total amount. New York's disbursement schedule will get the largest proportion of the total incentive amount to each hospital as quickly as possible, meaning incentive payments to New York hospitals will be disbursed as follows:

Participation Year Proportion of Total Incentive
Year 1 50%
Year 2 40%
Year 3 10%
Year 4 0%

For a detailed discussion of the hospital incentive payment calculation, including an explanation of each input and a sample calculation, see Appendix VI ("Hospital Incentive Payment Calculation") in the approved NY-SMHP.