The Medicaid EHR incentive audit program: No longer a sleeping giant

Sometimes there's so much attention paid to the Centers for Medicare & Medicaid Services and the Medicare Meaningful Use program that we tend to overlook the Medicaid side.

But we shouldn't. The Medicaid incentive program--and more specifically, its audit potential--just catapulted into new territory.   

The U.S. Department of Health and Human Services' Office of Inspector General released an audit report this week revealing that Louisiana's Department of Health and Hospitals made more than $4 million in payment errors by miscalculating what Medicaid Meaningful Use incentive payments providers were entitled to. The agency made incorrect payments to 20 hospitals, overpaying two-thirds of them for a net overpayment of $1.8 million. The agency also overpaid a number of eligible professionals. The errors were caused by a myriad of problems, including using the wrong calculation formula, use of incorrect cost reports, documentation issues, lack of system edits, even clerical errors.

Welcome to the unofficial next stage of the incentive payment audit program.

Louisiana was one of the first states to make payments under the Medicaid incentive program, paying more than $93 million in 2011 alone, the first year of the program. So it was logical for OIG to audit Louisiana first.

This is only the beginning. This audit has implications way beyond Louisiana and its 2011 payments.

With this audit, OIG is alerting every state that the Medicaid incentive payments doled out are in its crosshairs. OIG is very worried about the integrity of the program, and is no longer focused only on the Medicare incentives:

"The Government Accountability Office has identified improper incentive payments as the primary risk to the EHR incentive programs. These programs may be at greater risk of improper payments than other programs because they are new and have complex requirements ... the programs [are] vulnerable to paying incentive payments to providers that do not fully meet requirements," the OIG report warns.

You can just smell the low hanging fruit.

In just one audit of 25 hospitals for just one year, the federal government gets to recoup $1.8 million from Louisiana; in turn, the state is required to "adjust" the payments made to the hospitals.

And just in case a state does not want to be singled out the way Louisiana has been, this audit gives the states a detailed roadmap of how to check their own work and identify potential overpayments. I'll bet that this will spur states to be proactive and beat OIG to the punch, cracking down on providers who have received Medicaid incentive payments.

And what about all of the providers that have received Medicaid incentive payments? You may want to reconfirm that your payments are calculated correctly and double check your supporting documentation.

This sleeping giant is waking up. - Marla (@MarlaHirsch and @FierceHealthIT)