NOTE 12 - ELECTRONIC HEALTH RECORDS INCENTIVE PROGRAM

9 Months Ended

Dec. 31, 2011

Significant Accounting Policies [Text Block]

NOTE 12 – ELECTRONIC HEALTH RECORDS INCENTIVE PROGRAM

Provisions of the American Recovery and Reinvestment Act of 2009 provide incentive payments for the adoption and meaningful use of certified electronic health record (EHR) technology.  The Medicare EHR incentive program provides incentive payments to eligible hospitals (and certain other providers) that are meaningful users of certified EHRs.  The Medicaid EHR incentive program provides incentive payments to eligible hospitals (and certain other providers) for efforts to adopt, implement, upgrade, or meaningfully use of certified EHR technology.

CMS has established the final rule which requires eligible providers in their first year of participation in the Medicaid incentive payment program to demonstrate that they have adopted (acquired, purchased, or secured access to), or implemented, or upgraded to certified EHR technology in order to qualify for an incentive payment.  During the second and subsequent years of the program, eligible providers are required to meet other criteria, including meaningful use, to receive additional funds.    The Company was awarded a total amount of $13.6 million under the Medicaid EHR incentive program, which will be earned and received over a four year period.

The Company adopted certified EHR technology (Note 13) and recognized income of $6.8 million relative to the first year under the Medicaid EHR incentive program, which is reflected as other income in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended December 31, 2011.

The Company received $2.6 million under the program as of December 31, 2011 and received the remaining $4.2 million in January 2012.  As a result, the accompanying unaudited condensed consolidated balance sheet reflects a receivable of $4.2 million as of December 31, 2011.