Virginia Medicaid Electronic Health Record Payments

From July 1, 2012, through June 30, 2013, the Virginia Department of Medical Assistance Services (State agency) paid $78.2 million to 73 eligible hospitals in Virginia for Medicaid EHR incentive payments. We reviewed hospitals that received an incentive payment totaling $1 million or more. There were 15 hospitals that each received total incentive payments exceeding $1 million; however, because the State agency contracted with a public accounting firm to perform desk reviews of hospitals' cost reports, we limited our audit to 5 hospitals that were not reviewed by the accounting firm at the time of our audit. The State agency made incorrect EHR incentive payments to two hospitals totaling $38,000. We recommended that the State agency refund the $38,000 in net overpayments made to the two hospitals and adjust the two hospitals' remaining incentive payments to account for the incorrect calculations (which will result in future cost savings of $38,000); and (3) review the calculations for the hospitals not included in the five we reviewed to determine whether payment adjustments are needed, and refund any overpayments identified. In written comments on our draft report, the State agency noted that its public accounting firm conducted post payment audits at the two hospitals and identified additional overpayments that it addressed after we completed our fieldwork.