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OIG Recommends Audits of Meaningful Use Incentive Payments

In order to encourage health providers to use electronic medical records (“EHRs”) in lieu of paper records, Congress passed the Medicare and Medicaid Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) in 2009.

The HITECH Act allowed hospitals and other eligible professionals, (“EPs”) to obtain payments if they could achieve “Meaningful Use” of EHRs. The payments are significant. In June of 2014, Medicare made EHR incentive payments totaling approximately $6 billion.

In order to monitor this generous federal program, the OIG recently published its review of whether certain incentive payments were in compliance with the existing law.

The OIG audit period was from May 2011 to June 2014 and included approximately 250,000 EPs who had received incentive payments. The OIG conducted a random sample of 100 EPs and identified 14 EPs with payments totaling $291,222 that did not meet the “Meaningful Use” requirements of the law. Extrapolating to the entire population of EPs, the OIG estimated that CMS had inappropriately paid approximately $700 Million in incentive payments to physicians and hospitals. One could debate whether this small sample was a statistically significant or meaningful sample and whether this was an appropriate extrapolation. Based on this sample however, the OIG found the following errors:

  1. Meaningful Use compliance was based upon self-attestation by EPs. However, some EPs did not maintain or could not provide adequate support for their Meaningful Use attestations. For example, EPs must keep documentation supporting their demonstration of Meaningful Use for six years.
  2. Medicare requires EPs to base their self-attestation of Meaningful Use on patient and encounter data from the appropriate EHR reporting period. In an EP's second program year, the EP is required to attest to a full calendar years' worth of encounter data. One EP based the attestation of Meaningful Use on just 90 days of encounter data.
  3. Medicare defines Meaningful EHR Users as EPs who have at least 50% of their patient encounters during the reporting period at a location equipped with certified EHR technology. One EP had less than 20% of his patient encounters at a location that used the certified EHR technology, thus failing the 50% test.
  4. After receiving at least one EHR incentive payment, an EP may switch between the Medicare and Medicaid incentive programs only one time and only for one payment year before 2015. Once an EP switches from one program to the other, the EP remains in the same program year that would have been in effect had the provider not elected to switch. Some EPs switched programs and CMS inappropriately made higher payments as if the EP was in the first payment year instead of in the second lower payment year.
  5. Upon the death of an EP, the NPI should be deactivated within 60 days. Without a valid NPI, an EP is ineligible for the incentive payments under the EHR program. In some cases, CMS made payments more than 60 days’ past the date of death.

Based upon this limited audit, the OIG made the following recommendations; most of which were agreed to by CMS:

  • Recover the approximately $291,000 in payments made to the sampled EPs who did not meet the requirements of Meaningful Use
  • Review the EP incentive payment program to attempt recovery of the estimated approximately $700 million in inappropriate incentive payments
  • Review a random sample of EPs' documentation supporting self-attestation to identify inappropriate incentive payments
  • Educate EPs on the proper documentation requirements
  • Recover the estimated approximately $2,300,000 in overpayments made to EPs due to switching the incentive programs between Medicare and Medicaid
  • Employ edits to ensure that an EP does not receive payments under both EHR incentive programs for the same calendar year

Clearly there will be additional audits by CMS to try to capture any overpayments under the Meaningful Use incentive programs. Hospitals and other professionals would be well advised to make sure that they can properly document their qualification for these incentive payments.

Although this OIG Report only speaks of audits that recapture government funds, where there is a serious case of intentional wrongdoing the government may bring criminal charges. In January of 2014, the CFO (Chief Financial Officer) of Shelby Regional Medical Center in Center, Texas, was charged with falsely certifying that the hospital met the criteria for Meaningful Use of EHRs. Following the CFO’s guilty plea, the court sentenced the executive to 23 months in federal prison and restitution of approximately $5 million. Due to the significant amount of money that has been paid out because of the HITECH Act’s incentive program, the government will clearly pursue wrongdoing when it is discovered.

Categories: HITECH Act, Medicare/Medicaid

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Gary has nearly 40 years of experience and has earned a reputation for handling sophisticated transactions for hospitals, managed care organizations, HMOs, health insurers, physician groups and other provider entities and for helping his clients stay on top of complex regulatory issues, such as Anti-Kickback Statute, Stark II, Medicare, Medicaid, and BCBSM reimbursement appeals. 

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