- An Office of the Inspector General audit found that the Louisiana Department of Health & Hospitals made incorrect EHR incentive payments of $4.4 million to 20 hospitals in 2011. According to OIG, the state agency overpaid 13 hospitals to the tune of $3.1 million and underpaid 6 hospitals a total of $1.3 million, creating a $1.8 million net overpayment. (The agency also overpaid one additional hospital, but the funds had already been repaid by the conclusion of the audit.)
- The audit examined 25 of the highest-paid hospitals under the program, which received a total of $53.2 million.
- OIG recommends that the state agency refund the federal government for overpayments, adjust the remaining incentive payments to account for the incorrect calculations and improve reporting policies. The state agency agreed with the assessment and has moved to correct the situation.
$4.4 million might not be a staggering number, but the fact that 80% of analyzed hospitals—and remember these are the highest-paid hospitals in the state—failed to comply with federal regulations is pretty striking. Blame looks like it rests pretty equally on both hospitals and the state agency: According to OIG, the errors were the result of incorrect patient volume calculations that lead hospitals to get the numbers wrong. The state agency also failed to correct a formula error in a discharge calculation worksheet for hospitals. Add that to a lot of clerical errors and it adds up to $4.4 million.
"A review would have shown that the incorrect cost report periods were used, and the supporting documentation would have shown when hospitals included inpatient nonacute-care services," the OIG deputy inspector general for audit services, Gloria L. Jarmon, said in the report. "State agency personnel did not use the correct cost report periods or review supporting documentation for the numbers provided in the cost reports that were used to calculate incentive payments."
Despite challenges hitting Meaningful Use benchmarks, hospitals will want to consider careful self-auditing going forward, rather than be caught by surprises like this one. There is plenty of precedent to hold hospitals accountable for incorrectly claiming funds: Earlier this year, the former CFO of Shelby Regional Medical Center in Texas was indicted for claiming $1 million in wrongful EHR payments (although this was a pretty flagrant example of fraud).
"As more and more federal dollars are made available to providers to adopt electronic health record systems, our office is expecting to see more cases like this one," Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General's Dallas Regional Office said in a February 6 press statement about the incident. "The Office of Inspector General is committed to protecting the millions of taxpayer dollars used to pay providers to adopt electronic health record systems."
Louisiana was one of the first states to pay Meaningful Use incentive payments, dolling out $93 million Medicaid EHR incentive payments in 2011, the program's first year. The payments are funded entirely with federal money and the national program has paid out almost $25 billion to 410,600 providers nationwide thus far.
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