New York Made Some Incorrect Medicaid Electronic Health Record Incentive Payments

The New York State Department of Health (State agency) did not always pay electronic health record (EHR) incentive payments in accordance with Federal and State requirements. The State agency made incorrect EHR incentive payments to two hospitals totaling $175,000. Because the incentive payment is calculated once and then paid out over 3 years, payments after June 30, 2014, will also be incorrect. The adjustments to these payments total $19,000. The State agency correctly paid the five professionals we reviewed.

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 made $588.9 million in Medicaid EHR incentive payments from October 1, 2011, through June 30, 2014.

We recommended that the State agency (1) refund to the Federal Government $175,000 in overpayments made to the 2 hospitals; (2) adjust the 2 hospitals' remaining incentive payments to account for the incorrect calculations (which will result in future cost savings of $19,000); and (3) review the incentive payment calculations for the hospitals not included in the 30 we reviewed to determine whether payment adjustments are needed, and refund any overpayments identified.

In written comments on our draft report, the State agency did not agree with our first two recommendations and agreed with our third recommendation.