HHS OIG: CMS $93.6 Million in Incorrect Medicare EHR Incentive Payments to Acute-Care Hospitals, or Less Than 1 Percent of $10.8 Billion

Why OIG Did This Audit

“The Federal Government makes Medicare payments to acute-care and critical-access hospitals as an incentive for using electronic health records (EHRs). A prior OIG audit found that the Centers for Medicare & Medicaid Services (CMS) made an estimated $729 million in Medicare EHR incentive payments to eligible professionals who did not comply with Federal requirements. In addition, 17 prior OIG audits of Medicaid EHR incentive payments found that States overpaid hospitals by $66.7 million and would in the future overpay these hospitals an additional $13.3 million. These overpayments resulted from inaccuracies in the hospitals’ calculations of total incentive payments. This audit focuses on Medicare EHR incentive payments made to acute-care hospitals from January 1, 2013, through September 30, 2017 (audit period). Another OIG audit will focus on Medicare EHR incentive payments made to critical-access hospitals…”

What OIG Found

“CMS did not always make Medicare EHR incentive payments to acute-care hospitals in accordance with Federal requirements. Specifically, of 99 sampled net incentive payments, 50 net incentive payments were incorrect (totaling $1.3 million, or less than 1 percent of $152.2 million reviewed). The incorrect net incentive payments occurred because (1) the Medicare administrative contractors did not review the supporting documentation for all hospitals to identify errors in the hospitals’ cost-report numbers used to calculate the incentive payments; and (2) CMS did not include labor and delivery services in the incentive payment calculations, which resulted in hospitals receiving inflated incentive payments. On the basis of our sample results, we estimated that CMS made incorrect net incentive payments of $93.6 million, or less than 1 percent of the $10.8billion in total incentive payments for our audit period.”

What OIG Recommends and CMS Comments

“To address the 50 incorrect net incentive payments in our sample, we recommend that CMS (1) recover from acute-care hospitals the portion of the $1.3 million in incorrect net incentive payments that are within the reopening period; and (2) for the remaining portion of the $1.3 million, which is outside of the reopening period, notify the acute-care hospitals associated with the incorrect payments so that those hospitals can exercise reasonable diligence to investigate and return any identified similar incorrect payments. To attempt recovery of the $93.6 million in estimated incorrect net incentive payments made during our audit period and to ensure that all final and non-final payments made after our audit period are correct, we also made two procedural recommendations to CMS(detailed in the report)…”

Read the full 29-page report here.

Source: CMS Made an Estimated $93.6 Million in Incorrect Medicare Electronic Health Record Incentive Payments to Acute-Care Hospitals, or Less Than 1 Percent of $10.8 Billion in Total Incentive Payments – December 2019, HHS OIG.

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