OIG: Massachusetts overpaid Medicaid EHR incentives to hospitals

Massachusetts overpaid hospitals for the Medicaid electronic health record incentive program by $2.1 million over a two-year period from 2011 through the end of 2012, according to a new report from the U.S. Department of Health and Human Services Office of Inspector General.

Overall, the state's Executive Office of Health and Human Services, Office of Medicaid incorrectly incentivized 19 hospitals. Thirteen hospitals were overpaid $2.7 million, while six were underpaid by $564,000. Of 25 incentive payment calculations reviewed, 19 failed to comply with regulations, guidance, or both, according to the OIG

The agency also failed to report two hospital incentive payments totallying $2.4 million to the Centers for Medicare & Medicaid Services' National Level Repository (NLR), according to the report. Additionally, the OIG determined that "payments subsequent to calendar year 2012 will also be incorrect" since hospital calculation is computed once and paid out over three years.

While the OIG called on Massachusetts to refund the $2.1 million in overpayments to the federal government and to adjust the hospitals' remaining incentive payments to avoid making an additional $1.7 million in future payments, the state denied some of the findings, saying it already refunded $1.3 million of the overpayments to 15 of the 19 hospitals. The state contends that OIG's calculations should be adjusted for "data source and methodological discrepancies" that would lower the overpayment aggregate figure.

The state also said that it did, in fact, post two hospital incentive payments to CMS' NLR; one on Dec. 24, 2012, and the other on Dec. 31, 2012. OIG, however, maintained that those payments were not transmitted to the NLR.

In September, OIG found that Louisiana's Medicaid incentive payment program made numerous errors in determining what incentive payments providers earned, which led to net overpayments of $1.8 million.

The OIG previously expressed concern about the wrong incentive payment amounts being paid to providers. The Government Accountability Office has identified improper incentive payments as the primary risk of the incentive programs.

To learn more:
- read the OIG report (.pdf)

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