West Virginia Made Incorrect Medicaid Electronic Health Record Incentive Payments to Hospitals

From July 1, 2011, through December 31, 2013, the West Virginia Department of Health and Human Resources, Department of Medical Assistance Services (the State agency) paid $50.3 million to 42 eligible hospitals in West Virginia for Medicaid electronic health record (ERD) incentive payments. We reviewed hospitals that received an incentive payment totaling $1 million or more. There were five hospitals that each received total incentive payments exceeding $1 million.

The State agency made incorrect EHR incentive payments to three hospitals totaling $295,962. We recommended that the State agency (1) refund the $296,000 in net overpayments made to the three hospitals and adjust the two hospitals' remaining incentive payments to account for the incorrect calculations (which will result in future cost savings of $208,000), 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. The State agency concurred with our recommendations but stated that the number of Medicaid managed-care inpatient days for hospital 2 should have been 20,682 instead of 20,215, the number we used in our computation. Our report reflects this adjustment.