3 states overpaid more than $1.5M in Medicaid MU incentives

Audit magnifying

State agencies continue to struggle to make correct Medicaid Meaningful Use incentive payments, with the Health and Human Services Department's Office of Inspector General finding overpayments made to hospitals in West Virginia, Ohio and Oklahoma.

OIG reviewed five hospitals in West Virginia that each received incentive payments of more than $1 million during the designated audit period. The state paid three of them incorrectly because it calculated payments using hospital-provided data that was not supported by the source documentation, resulting in an overpayment of $295,962.

The state agency in Ohio had made incorrect payments to 10 hospitals that had received incentive payments each of more than $ 1 million, nine of which were overpayments, resulting in a net overpayment of $524,162. The errors occurred because the state didn’t ensure that the hospitals had removed all bad debt/write-offs from charity care when calculating the payments.

Meanwhile, a review of 25 hospitals in Oklahoma found incorrect payments for 11 of them, of which seven were overpayments, for a total overpayment of $680,368. The state had not reviewed all of the numbers provided in the hospitals’ calculations, which contained errors.

This is not the first time that Oklahoma has made an incentive payment error; in 2015, the HHS OIG found that the state had overpaid healthcare professionals more than $888,000.

OIG recommended, among other things, that the states refund the overpayments to the federal government, review the payments they have made to other providers, and educate hospitals regarding how to calculate their incentive payments correctly.

The audits are part of a series of reports focusing on the Medicaid Meaningful Use program for hospitals. Of the audits thus far conducted, only Florida, Pennsylvania and the District of Columbia have been found to have made incentive payments correctly.