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Errors by CMS May Cost Providers "Hundreds of Millions": What Providers Need to Know Now

Dennis G. Sadler \ 06-19-17

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What government gives, Government can take away.”  -Cardinal Timothy Dolan

Cardinal Dolan was not the first to make this self-evident statement, and he is not likely to be the last. Rather, numerous medical providers are likely to become reacquainted with the truth of the statement if the Centers for Medicare & Medicaid Services (CMS) follows the recommendations of the Office of the Inspector General of the Department of Health and Human Services (OIG) regarding improper incentive payment to providers for usage of certified electronic health records (EHR).

Since 2011, to encourage medical practitioners to utilize the EHR system, the Federal government has paid over $6 billion in incentives to eligible practitioners who meet “meaningful use” standards for EHR. To receive incentive payments, the eligible providers had to attest that they met program requirements by self-reporting data through the National Level Repository (NLR).

The OIG recently released a Report outlining the results of an audit of those payments, strikingly entitled “Medicare Paid Hundreds of Millions in Electronic Health Record Incentive Payments That Did Not Comply With Federal Requirements.” According to the Report, from 2011 to 2014 CMS paid an estimated $729,000,000.00 in improper EHR incentive payments to eligible practitioners who did not comply with the Federal Requirements. In addition, CMS paid $2,300,000.00 in inappropriate EHR payments to eligible practitioners who switched incentive programs.

According to the statistical sampling in the Report, the OIG estimates that approximately 14% of eligible practitioners received improper incentive payments. Among the most common of the issues cited, 12% of the eligible practitioners could not provide adequate support for their meaningful use attestation. The OIG also found the some eligible providers provided attestations for periods of less than the required full year’s use or did not meet the requirement that 50% of their meaningful use patient encounters be at a location equipped with certified EHR technology. Of the 100 eligible providers sampled, the OIG found $291,222.00 in improper payments, which they extrapolate to $729,424,395.00 in improper payments system-wide to practitioners who could not adequately demonstrate meaningful use.

Another issue cited in the Report by the OIG involved payments to eligible practitioners who changed incentive programs. Specifically, while both Medicare and Medicaid offered incentives for meaningful use, a practitioner could not receive payment under both programs in the same year. A practitioner could elect switch between the two programs. When the practitioner switched, the payments under the subsequent year were supposed to be reduced according to the annual declining scale for payments throughout the program. However, the OIG found that 471 eligible providers who switched, received an additional payment as if they were in the first year of the program. This resulted in improper payments of $2,344,680.00.

The release of the Report, whose title alone will attract a lot of attention, is likely to have both immediate and long-term impact on any physician who has received EHR incentive payments in the past, or is utilizing EHR usage as the basis for increased payments under the new Medicare Access and Children’s Health Insurance Program [CHIP] Reauthorization Act (MACRA). While the Report cites inadequate oversight by CMS as the key factor leading to the “abuse and misuse of Federal funds,” the OIG recommended that CMS recover the estimated $729,424,395 in improper payments and $2,344,680 in overpayments. In its response, CMS partially agreed with the recommendations of the OIG. In addition to agreeing to recover the $2,344,680 in overpayments, CMS promised increased oversight and targeted audits to strengthen the program integrity. The impact is most likely to be felt among small practices, many of whom could barely afford to participate in the EHR program and certainly cannot afford to undergo audits and repay money that was spent long ago.

Nonetheless, based upon the finding in the Report, practitioners should redouble their efforts to ensure proper compliance with EHR requirements, and make certain they maintain support for attestation to NLR or CMS of the “meaningful use.” In addition, practitioners who switched programs should do an immediate audit of their incentive payments to determine if the received the first-year incentive twice. If they discover that they did, they should remember the requirement to return any overpayment within 60 days. Finally, all practitioners should prepare for increased audits and the “targeted audits” promised by CMS, by having an independent audit of their compliance on an annual basis, to ensure that they meet the requirement for a compliance program that is effective in identifying improper payments under any Federal program.

Dennis Sadler received a J.D. from the University of Memphis, Cecil C. Humphreys School of Law and an L.L.M. in Health Law, with a Concentration in Compliance, from Loyola University, Chicago School of Law. He is a Member of the law firm of Leitner, Williams, Dooley & Napolitan, where his practice focuses on health law, construction law, products liability, and premises liability.

The information contained in this article is intended for informational purposes in general and not to provide specific legal advice. If you have any questions about this article or your compliance requirements, please contact the author or consult with your counsel.