Inspector General Says CMS Made $729 Million In Questionable EHR Incentive Payments

Posted on June 16, 2017 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she’s served as editor in chief of several healthcare B2B sites.

A new report from the HHS Office of Inspector General has concluded that over a three-year period, CMS made roughly $729.4 million in EHR incentive payments to providers who didn’t comply with program requirements.

To determine whether the incentive program was functioning appropriately, the OIG audited payments made between May 2011 to June 2014.

After sampling payment records for 100 eligible professionals, the agency found 14 EPs, who received payments totaling $291,022, who didn’t meet incentive criteria.  The auditors found that the 14 had either failed to meet bonus criteria or didn’t provide proof that they had.

Then, the OIG used the data to extrapolate how much CMS had spent on invalid payments, which is how it arrived at the $729 million estimate. In other words, given the margin of error across the sampled incentive payments, the OIG assumed that 12% of all incentive payments were in error. (The analysis also concluded that CMS mistakenly paid $2.3 million to EPs switching between Medicare and Medicaid programs.)

Not surprisingly, the OIG has recommended that CMS recover the $291,000 in payments made to the sampled providers. It also suggested that the agency review EP payments issued during the audit period to see what other errors were made. Of course, the ultimate goal is to get back the approximately $729.4 million the agency may have paid out in error.

In addition, the OIG  called on CMS to review a random sample of self-attested documentation from after the audit period, to determine whether additional inappropriate payments were made to EPs.

And to make sure the EPs don’t get payments under both Medicare and Medicaid incentive programs for the same program year, the report urged CMS to conduct edits of the National Level Depository system.

As part of this report, the OIG noted that allowing providers to self-report compliance data leaves the incentive payment program open to fraud, and recommended keeping a closer eye on these reports. CMS seems to have had at least some sympathy for this argument, as it apparently agreed partly or fully with all of the OIG’s suggested actions.

One side effect of the OIG report it brings back attention to the Meaningful Use program, which has been eclipsed by MACRA but still clings to life. Eligible providers can still report either Modified Stage 2 or Stage 3 in 2017, the main difference being you need a full year of data for Stage 2 but only 90 days for Stage 3.

But MACRA does change things, as its performance standards will test providers in new ways. This year, providers have a chance to get situated with either the MIPS or APM track, and those who jump in now are likely to benefit.

Meanwhile, the future of Meaningful Use remains fuzzy. To my knowledge, the agency has no immediate plans to restructure the current incentive program to audit provider reports in depth. In fact, given that providers are more concerned about MACRA these days, I doubt CMS will bother.

That being said, it’s fair to assume that incentive payouts will get a bit more attention going forward. So be prepared to defend your attestation if need be.