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Audit (A-06-12-00041)

08-26-2014
Louisiana Made Incorrect Medicaid Electronic Health Record Incentive Payments

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Summary

The Louisiana Department of Health & Hospitals (State agency) did not always pay Medicaid electronic health record (EHR) incentive payments in accordance with Federal and State requirements. The State agency made incorrect EHR incentive payments to 20 hospitals totaling $4.4 million. Specifically, the State agency overpaid 13 hospitals a total of $3.1 million and underpaid 6 hospitals a total of $1.3 million, for a net overpayment of $1.8 million. The State agency made an incorrect payment to an additional hospital; however, we confirmed that the payment had been recovered during our audit. Additionally, the State agency did not ensure that hospitals correctly calculated patient volume for 24 hospitals, made incorrect incentive payments to 13 professionals for a total overpayment of $3,250, and did not report 13 professional incentive payments to the CMS National Level Repository (NLR).

The Health Information Technology for Economic and Clinical Health Act, enacted as part of the American Recovery and Reinvestment Act of 2009, established Medicare and Medicaid EHR incentive programs to promote the adoption of EHRs. As an incentive for using EHRs, the Federal Government is making payments to providers that attest to the "meaningful use" of EHRs. The State agency was one of the first to pay incentive payments, making approximately $93 million in Medicaid EHR incentive program payments during calendar year 2011.

We recommend that the State agency (1) refund to the Federal government $1.8 million in net overpayments made to the 20 hospitals, adjust the 20 hospitals' remaining incentive payments to account for the incorrect calculations, review the calculations for the hospitals not included in the 25 we reviewed to determine whether payment adjustments are needed, and refund any overpayments identified; (2) modify the hospital calculation worksheet, correct the formula to calculate the discharge-related amounts, ensure that the correct cost report periods are used, and review supporting documentation for the numbers provided in the cost reports; (3) modify the patient-volume worksheet to clarify the patient-volume calculation, review the patient-volume calculation for the other hospitals not included in the 25 we reviewed, and refund any overpayments identified; (4) refund to the Federal government $3,250 in overpayments made to the 13 professionals, implement system edits to prevent payments that exceed threshold amounts, and ensure that personnel are knowledgeable about the EHR program requirements; and (5) work with CMS to ensure that the 13 professional incentive payments not posted to the NLR are posted and establish a policy to reconcile the CMS-64 report to the NLR each quarter. The State agency concurred with our recommendations.

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