There are a lot of questions and confusion around how to calculate the stimulus incentive payments that I hope to clear up in this post. My calculator on this site uses the most common method for calculating the Medicare payments but I will also explain the calculation for Medicaid.
Medicare
The first thing to do is figure out an estimate of your Medicare submitted allowable charges per patient. The Act does state that Medicare submitted allowable charges will be multiplied by 75% to figure out your annual incentive payments but there is some debate that this number may end up being the Medicare actual submitted charges multiplied by 75% which would be a lower number. A physician wanting to receive the full first year payment of $18,000 would need to submit allowable charges to Medicare of at least $24,000 to receive the full amount for first year’s payment. If you submit $18,000 for allowable charges then your payment would be $13,500. Each year the cap reduces so you can figure out your total incentive per physician by adding up the max expected stimulus for each of the years.
| Year they first file | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | TOTAL |
| 2011 | $18,000 | $12,000 | $8,000 | $4,000 | $2,000 | $0 | $44,000 |
| 2012 | $0 | $18,000 | $12,000 | $8,000 | $4,000 | $2,000 | $44,000 |
| 2013 | $10 | $10 | $15,000 | $12,000 | $8,000 | $4,000 | $39,000 |
| 2014 | $0 | $0 | $0 | $15,000 | $12,000 | $8,000 | $35,000 |
| 2015 or later | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Items to note
Physicians operating in a “provider shortage area” will be able to increase their cap of 10%. Additionally, physicians operating entirely in a hospital environment are not eligible for these stimulus funds as the hospitals have a different calculation for the stimulus funds they are eligible to receive.
Calculating total Medicare
To calculate your total incentive payment per physician for each year, simply use the following equation:
x= Average number of patients per MD per day
y= % of patients who are Medicare
z= Average submitted allowable per Medicare patient
a= Working days per year for the physician
(.75(a(z(y*x))))= Eligible Medicare submitted allowable charges
If this number is larger than the cap for each year (above table) then take the max allowable for each year and add it up for the total incentive per physician. If it is less, than use the number calculated above.
Medicaid
Calculating Medicaid payments is much more simple and provides a greater payment up front than the Medicare incentive package. Reasoning behind this is to encourage more physicians to accept Medicaid patients, but the requirements may seem to stiff for most physicians.
Medicaid stimulus calculations require physicians to see more than 30% of patients paying with Medicaid with the exception of pediatricians only required to see 20%. If your billing meets these requirements then your incentive payments are simple. $35,000 for the first year and $10,000 for subsequent years over the five year period with a total incentive payment of $64,000.
Practice totals
It is important to note that stimulus payments are calculated per physician. If a practice has multiple physicians, then this must be done for each physician and then totaled to figured out the maximum payment for an entire practice. If a practice is able to receive the maximum Medicare amount for 5 physicians, then the total payment would be $220,000 for the entire practice.
How payments are made
Although the basic formulas are available to estimate payments, there has been no official word yet on exactly when and how the payments are going to be made. It is expected that the official process for application, certification of meaningful use for the year and disbursement of payments will be out by the end of September 2009.