OIG: La. overpaid $1.8 million in meaningful use incentives
By - The Louisiana Department of Health & Hospitals was one of the first state organizations to pay EHR incentive payments. In fact, Louisiana made approximately $93 million in Medicaid EHR Incentive Program payments during the 2011 calendar year, according to the Department of Health & Human Services (HHS). However, Louisiana also made incorrect EHR incentive payments to 20 hospitals totaling $4.4 million, the HHS reported in a recent audit.
Specifically, the Louisiana agency overpaid 13 hospitals a total of $3.1 million, while also underpaying 6 hospitals a total of $1.3 million. The total net overpayment equaled $1.8 million, according to HHS.
“The State agency made an incorrect payment to an additional hospital; however, we confirmed that the payment had been recovered during our audit,” the HHS report indicated. “Additionally, the State agency did not ensure that hospitals correctly calculated patient volume for 24 hospitals, made incorrect incentive payments to 13 professionals for a total overpayment of $3,250, and did not report 13 professional incentive payments to the NLR.”
The errors occurred for several reasons, according to the HHS. First, the state agency’s instructions on the hospital incentive payment and patient-volume calculations were incorrect or did not have all of the necessary information. The hospital calculation worksheet that the department used also had an error in the formula used to calculate discharge-related amounts.
Furthermore, HHS reported that agency personnel made clerical errors and they failed to use the right cost report periods. State personnel also did not review the supporting documentation for numbers provided in the cost reports that were used to calculate incentive payments.
Lastly, the Louisiana agency did not have the necessary system changes in place to prevent overpayments to professionals and it “did not reconcile the CMS-64 report with the NLR,” reported HHS.
To fix the situation, the state agency needs to take several steps. The federal government must first receive a $1.8 million refund. The 20 hospitals that were overpaid will then need to have their incentive payments adjusted. The Louisiana entity must also modify its calculation worksheet, correcting the formula to calculate the discharge-related amounts.
HHS also recommended that the Louisiana department “modify the patient-volume worksheet to clarify that inpatient discharges — not bed-days — should be used in the patient-volume calculation and review the patient-volume calculation for the other hospitals not included.”
Also, HHS suggests that the state agency “refund to the Federal government $3,250 in overpayments made to the 13 professionals” and also apply system edits to prevent payments that exceed threshold amounts. The Louisiana department must guarantee that its’ employees understand the EHR program requirements. The agency also needs to be willing to work with CMS “to ensure that the 13 professional incentive payments not posted to the NLR are posted and establish a policy to reconcile the CMS-64 report to the NLR each quarter.”
The Louisiana Department of Health & Hospitals agreed to all recommendations from the HHS, according to the report.
