Editor's Corner: OIG audit reveals Meaningful Use's dirty secrets

Marla Hirsch

So far this year we’ve seen a shift in attention when it comes to electronic health records: less on the EHR Incentive Program, and more on the newer, more trendy issues, such as precision medicine, the Medicare Access and CHIP Reauthorization Act and ransomware. 

But that old stalwart, Meaningful Use, is still a major focus, at least for the Department of Health and Human Services Office of Inspector General. And it should be for the rest of us, as well, based on what OIG has been unearthing.

The OIG issued its latest audit report on how states are paying Medicaid Meaningful Use incentives, and it isn’t pretty. The Arizona Health Care Cost Containment System made incorrect Medicaid incentive payments to 24 out of 25 hospitals reviewed, totaling almost $15 million in overpayments.

That, in and of itself, is a large amount of money. But it’s compounded by the fact that the state agency has paid $151 million to 70 hospitals in the state, not to mention another $68 million to eligible professionals. Assuming that the same percentages of payment errors occurred with the providers that were not reviewed by the OIG, the potential amount that they were overpaid is tremendous.

Moreover, these overpayments were preventable. They occurred because hospitals didn’t always follow federal and state requirements for calculation of the incentive payments. Also, the state agency didn’t review the supporting documentation provided by the hospitals, which would have helped identify the calculation errors. 

But the audit doesn’t just reveal that Arizona has overpaid incentives; it also sheds light on several other unpleasant problems that have yet to receive due attention.

For starters, while some of the states that have made incentive payment errors have admitted their mistakes, repaid the federal government and taken other corrective action, Arizona is fighting back. It claims that it can’t verify that there really were $15 million in overpayments that it must return to the federal government, saying that the data that the hospitals provided to the OIG is not the same data that they provided to the state. The OIG is holding firm, saying that its calculations are valid and that the state and the hospitals must hash it out.

While I understand the logic behind the OIG’s position, it puts the state and the hospitals in an unenviable position. Which data is accurate? How do they hash it out? And will the OIG be satisfied with the end result if the state and hospitals determine that less than $15 million was overpaid?

Then there’s the sheer number of overpayments being found. The OIG has not audited every state thus far regarding the accuracy of their Medicaid incentive payments. However, Arizona is not unique in the magnitude of its errors. Oklahoma made overpayments of more than $888,000. Arkansas incorrectly overpaid $12 million. And Texas incorrectly paid more than $15 million. That’s a lot of money wrongfully being paid to providers who don’t deserve it all.

At best, providers and states have been sloppy and need education about how incentives are earned and calculated.  At worst, there are providers that are gaming the system that may not get caught. No wonder the Meaningful Use program has plowed through billions of dollars, some of it clearly not well spent.

There’s also the problem of the nature of the process. Some of these incentive payments are years old. Here we have the OIG running after the money after it’s been paid. It’s like the old “pay and chase” problem that Medicare has had for years and which the Centers for Medicare & Medicaid Services is working hard to move away from. But in the meantime, that money--taxpayer money--is in the wrong hands, even if innocently so.

Which brings us to the provider conundrum. How does this square with the Affordable Care Act’s requirement that identified overpayments must be returned to the government within 60 days? For some hospitals, this can be more than $1 million. That’s a lot of cash to repay in a short period of time. And as we see with Arizona, the hospitals don’t even know how much yet to repay. 

The law does allow providers some time to determine the repayment amount, but can Arizona and the hospitals (and other providers in the same predicament) resolve their differences in time?

While the Meaningful Use program may be in the rearview mirror for some, the incentive payments should still be front and center.  The mistakes being uncovered are raising buried or ignored issues that will haunt us for years. - Marla (@MarlaHirsch and @FierceHealthIT)

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