The Centers for Medicare and Medicaid Services has posted a new frequently asked question concerning the counting of inpatient-bed-days in determining the payment formula under the Medicaid electronic health records meaningful use program:

Question: May a hospital include zero pay Medicaid eligible days in the Medicaid hospital EHR Incentive Program payment calculation?

Answer: No, zero pay Medicaid eligible days must be excluded from the Medicaid hospital incentive calculation.

Section 1903(t)(5)(C) of the Act requires the Medicaid share to be calculated “in the same manner as the Medicare share.” In all ways possible, the Medicaid hospital incentive calculation is similar to Medicare, based on this language. Medicare retrieves data for the calculation exclusively from the Medicare cost report. Although Medicaid offers additional flexibility in data sources, the data parameters for Medicaid are the same as Medicare. This is cited in the Stage 1 final rule where CMS said:

“The statute requires us to calculate the Medicaid share ‘in the same manner’ as the Medicare share under section 1886(n)(2)(D) of the Act and such substitute service days would not be considered ‘in the same manner.’ Thus, we proposed that for purposes of the Medicaid formula, we would count only those days that would count as inpatient-bed-days for Medicare purposes under section 1886(n)(2)(D) of the Act.”

In the CMS Stage 1 final rule, CMS also made clear: “[T]he EHR hospital incentive payment calculation requires the inclusion of only paid inpatient-bed-days.”  75 Fed. Reg. at 44500.

Given this, a joint FAQ was published (FAQ # 3471) that mirrored cost report data sources for the calculation. Per the cost report instructions, all acute inpatient days must be paid. While CMS uses line 2 of worksheet S-3 part 1, which contains HMO data as well as other data used to calculate the Disproportionate Share Hospital (DSH) calculation (including zero pay days), Medicare is removing all of the DSH data from line 2 and using only the paid managed care days. Medicare does not include unpaid days as acute inpatient days, so following the same manner for Medicaid means using only paid days as well.  

Additionally, 1903(t)(5)(C) states that the Secretary establishes how the “inpatient bed-days” used in the Medicaid numerator are counted. The statute specifically says that the Medicaid share has as its numerator “the amount that is equal to the number of inpatient-bed-days (as established by the Secretary) which are attributable to individuals who are receiving medical assistance under this title.” By using only paid inpatient Medicaid days, the Secretary has “established” how she counts the number of inpatient bed days per statutory authority.

More meaningful use FAQs are available at, click on Electronic Health Records Incentive Programs.

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