Below I have highlighted and condensed information from the CMS EHR Incentive Program Notice of

Proposed Rulemaking (NPRM) that I believe is pertinent information for our clients to know regarding
Hospital-Based Eligible Professionals (also known as Provider-Based Eligible Professionals).

Hospital- Based Eligible Professionals

 The HITECH Act states that hospital-based EPs are not eligible to receive Medicare incentives
and the majority of hospital-based professionals will not be eligible to receive Medicaid
incentives.
o The only hospital-based EPs that will be eligible to receive Medicaid incentives are those
that practice predominantly in a federally qualified health center (FQHC) or a rural
health clinic (RHC).
 The Act defines “hospital-based eligible professional” as “an EP such as a pathologist,
anesthesiologist, or emergency physician that provides substantially all of his/her services in an
inpatient or outpatient hospital setting.”
o The Act defines a “hospital” as “an institution that is primarily engaged in providing , by
or under the supervision of physicians, to inpatients (A) diagnostic services and
therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or
sick persons, or (B) rehabilitation services for the rehabilitation of injured, sick, or
disabled persons”
 These EPs that practice predominantly in an inpatient hospital setting will be
considered hospital-based EPs
o Although the term “hospital” does not clearly encompass outpatient settings in its
definition, the term “hospital setting” for the purpose of Medicare and Medicaid
incentives includes both inpatient and outpatient settings.
 CMS considers an outpatient hospital setting as one that is “owned by and
integrated both operationally and financially into the entity, or main provider,
that owns and operates the inpatient setting”.
o CMS defines “substantially all” as providing “at least 90% of services in a hospital
setting, either inpatient or outpatient”.
o CMS also considers the use of place of service (POS) codes to determine whether or not
an EP provides “substantially all” of their professional services in a hospital setting
 This code set was adopted from HIPAA and is used as the national standard for
electronic transmission of professional health claims.
 21 – Inpatient Hospital – is a facility, other than psychiatric, which
primarily provides diagnostic, therapeutic (both surgical and
nonsurgical), and rehabilitation services by, or under, the supervision of
physicians, to patients admitted for a variety of medical conditions.
 22 – Outpatient – is a portion of a hospital which provides diagnostic,
therapeutic (both surgical and nonsurgical), and rehabilitation services
to sick of injured persons who do not require hospitalization or
institutionalization.
  23 – Emergency Room, Hospital – is a portion of the hospital where
emergency diagnosis and treatment of illness or injury is provided

In CMS’s proposed rule, “a hospital-based eligible professional would be ineligible to receive an

EHR incentive payment under either Medicare or Medicaid, regardless of the type of service they
provided, if more than 90% of their allowed services are identified as being provided in places of service
classified under POS codes 21, 22, or 23 based on their claims history from the previous year.

o For Example: an EP would be considered a hospital-based EP and be ineligible for Medicare

incentive payments in 2011 if he/she provided 90% or more of his/her allowed services in
places of service coded as 21, 22, or 23 based on their 2010 Medicare claims data.