Incentive Payment Calculation

Hospital incentive payments are based on a formula that is described by following this link: Medicaid Hospital Incentive Payment Calculations document.

In order for hospitals to accurately calculate their New Jersey Medicaid Promoting Interoperability Program payment, they should have the following information available:

  • Total acute inpatient discharges for the last 4 completed hospital fiscal year
  • Total acute inpatient bed days for the entire hospital fiscal year completed in the most recently completed federal fiscal year
  • Acute inpatient bed days which Medicaid (Title XIX only, fee-for-service or managed care) paid a share of for the same hospital fiscal year, excluding Medicaid/Medicare dual eligible days
  • Total charges for the hospital fiscal year completed in the most recently completed federal fiscal year
  • Total Charity Care charges for the hospital fiscal year completed in the most recently completed hospital fiscal year

All information included in a hospital's attestation will be subject to audit that could result in payment recoupment.  To mitigate the risk of recoupment, the New Jersey Medicaid Promoting Interoperability Payment Program recommends hospitals use one of the following data sources when performing their incentive payment calculation:

  • Medicare cost reports
  • Medicaid cost reports
  • Information from New Jersey's Medicaid Management Information System (MMIS) Hospital financial records or accounting system.

Incentive payments issued to hospitals may be reduced if the facility owes other amounts to New Jersey Medicaid, the State of New Jersey, or other governmental entities.  Hospitals will receive the balance of that year's incentive payment once all other outstanding amounts owed to these entities are cleared. 

Hospitals should maintain all information used in their incentive payment calculation for at least six years from their initial attestation.

Last Reviewed: 5/9/2018