CMS Dished Out $729.4 Million in Wrongful EHR Incentive Payments & We’re Going to Get that Money Back

Wrongful payments of Electronic Health Records (EHR) incentives are at the focus of two of the month’s biggest stories in health care compliance. The first came down on May 31 when the Justice Department announced that one of the biggest EHR software vendors in the country, eClinicalWorks, had settled false claims charges stemming from allegedly overstating the capabilities of its product. In addition to the $155 million price tag, the settlement is notable for the sweeping restrictions the Massachusetts- based vendor accepted under the associated Corporate Integrity Agreement.

Less than two weeks later came another EHR bombshell in the form of an OIG report suggesting that CMS made more than $700 million in EHR "meaningful use" incentive payments to providers.

By The Numbers
The June 12 OIG report can be summed up by its ominous title: "MEDICARE PAID HUNDREDS OF MILLIONS IN ELECTRONIC HEALTH RECORD INCENTIVE PAYMENTS THAT DID NOT COMPLY WITH FEDERAL REQUIREMENTS" (all caps theirs, not ours). Here are the report’s key numbers based on an audit period from May 2011 to June 2014:

  • 729,424,395: Estimated amount of total EHR overpayments (based on $291,222 of actual overpayments identified as being made during the audit period);
  • 12: The percentage of the $6.093 billion in total EHR incentive payments that were made to providers who didn’t actually meet meaningful use requirements; and
  • $2,344,680: EHR incentive payments made for the wrong payment year to providers who switched from Medicaid to Medicare incentive programs.

What Went Wrong
According to the OIG auditors, the $729.4 million in overpayments because providers didn’t maintain support for their attestations. Of the 100 eligible providers audited, 14 (with payments totaling $291.2K) weren’t actually in compliance with meaningful use requirements. The report cites three types of deficiencies:

  • Insufficient attestation support;
  • Inappropriate meaningful use periods reported; and
  • Insufficient use of certified EHR technology.

The OIG suggests that it wasn’t all the providers’ fault. "CMS conducted minimal documentation reviews, leaving the self-attestations of the EHR program vulnerable to abuse and misuse of Federal funds, the report concludes.

The CMS was also partly to blame for the $2.34 million in wrong payment year payments. The agency "did not have edits in place to ensure that eligible providers who switched from one program to the other were placed in the correct payment year upon switching," according to the report.

What Happens Now?
The overpayments already made are water under the bridge—except for the 14 audited providers who received the $291.2K which the OIG now intends to take back. For everybody else, the impact of the report are the actions it recommends going forward, including:

  • Get back the rest of the $729.1 million in wrongful EHR incentives by determining which other eligible providers received payments even though they didn’t actually meet meaningful use requirements;
  • Educate eligible providers about how to properly document self-attestation; and
  • CMS implementation of edits to ensure that eligible providers don’t get payments under both Medicare and Medicaid EHR incentive programs for the same program year.

Takeaway: About 12 cents of every dollar of the $6.1 billion in incentive payments to eligible providers for demonstrating "meaningful use" of certified EHR technology shouldn’t have been paid, according to the OIG. But now that the problem and its causes have been identified, corrective measures will be taken and providers who received incentive payments they didn’t deserve, which may include pathologists and labs, will have to pay back the money.


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