CMS miscalculates incentive payments, underpays hospitals

The Centers for Medicare & Medicaid Services has applied the wrong transition factor in calculating the Meaningful Use incentive payments for some hospitals, causing them to receive fewer incentive monies than what they were entitled to, according to an alert from the law firm of King and Spalding.

The transition factor is the part of the calculation that CMS uses that reduces the total incentive payment each year that an eligible hospital participates in the Meaningful Use incentive program. According to the alert, CMS is aware of the problem and will pay the remaining balances using the correct transition factor no later than the end of October 2014. The alert recommends that hospitals that have attested verify that the amounts paid to them were correct; if not, it says to monitor that CMS corrects the underpayment before November. The alert does not indicate how many hospitals have been affected by CMS' error, or whether CMS has notified the affected hospitals. Alert