CMS Made $93.6M in Incorrect Meaningful Use Payments, OIG Audit Reveals

Over a four-year period, the Centers for Medicare & Medicaid Services (CMS) made an estimated $93.6 million in Meaningful Use (MU) incentive payments to eligible professionals who did not comply with federal requirements, according to a new report from the Office of Inspector General (OIG).

Going back several years, the federal government has made Medicare payments to acute care and critical access hospitals as an incentive for using electronic health records (EHRs).  A prior OIG audit in 2017 revealed that CMS made an estimated $729 million in Medicare EHR incentive payments to eligible professionals who did not comply with federal Meaningful Use 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. According to OIG, an agency within the U.S. Department of Health & Human Services (HHS), these overpayments resulted from inaccuracies in the hospitals’ calculations of total incentive payments. 

This latest audit, which focused on MU payments to acute care hospitals from 2013 to 2017, covered $10.8 billion for nearly 8,300 Medicare EHR net incentive payments made during OIG’s audit period. The agency reviewed a statistical sample of 99 net incentive payments, totaling $152.2 million, of which 53 were final and 46 were non-final payments.

Of those 99 payments, 50 were found to be incorrect, totaling $1.3 million, or less than 1 percent of $152.2 million reviewed. According to OIG, the incorrect net incentive payments occurred for one of two reasons: 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 CMS did not include labor and delivery services in the incentive payment calculations, which resulted in hospitals receiving inflated incentive payments.

As such, on the basis of the sample results, OIG estimated that CMS made incorrect net incentive payments of $93.6 million, or less than 1 percent of the $10.8 billion in total incentive payments for the audit period.

What can CMS do to remedy the situation? First, OIG recommends that CMS recover from acute care hospitals the portion of the $1.3 million in incorrect net incentive payments that are within the reopening period. Also, OIG advised that for the remaining portion of the $1.3 million, which is outside of the reopening period, CMS ought to “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.”

Last year, the government finalized regulation that overhauls the Meaningful Use program into a new federal program called Promoting Interoperability, designed to advance health data exchange among providers.