Audit finds Louisiana Medicaid overpaid $3.1 million in EHR incentives

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The meaningful use incentive programs have driven many providers to implement electronic health record systems. According to the latest numbers from the U.S. Centers for Medicare and Medicaid Services, the program has paid 487,866 eligible providers a total of $24.87 billion since it began.

However, a recent audit conducted by the U.S. Department of Health and Human Services' Office of the Inspector General found that Louisiana's Medicaid program overpaid 13 hospitals by $3.1 million and underpaid six hospitals by $1.3 million, totaling $1.75 million in overpayments to 20 hospitals in 2011. One hospital was even paid incorrectly while the audit was being conducted.

The Times-Picayune reported that Louisiana was one of the initial states to begin paying incentives for EHR implementation after the Health Information Technology for Economic and Clinical Health Act passed in 2009. The Louisiana Department of Health and Hospitals awarded $93 million to eligible providers throughout 2011, and 25 hospitals made up $53 million of those incentive payments.

When auditing the incentives, the OIG found that the state's DHH failed to alert the CMS of 13 payments made to eligible professionals, which totaled$276,250, despite being required by law to do so. Additionally, 13 medical professionals were overpaid by a collective $3,250.

The OIG also discovered that Louisiana was giving hospitals incorrect instructions on the method of calculating patient volumes, which is used to determine incentive eligibility. The state told providers to base their patient volumes on inpatient bed days when they are supposed to use the number of patient discharges to determine the statistic.

OIG suggestions and the state's reply
In order to correct the payment issues, the OIG recommended that Louisiana refund the federal government all of the overpayments made to hospitals and professionals, as well as adjust the 20 hospitals' future incentive to account for the past discrepancies. It also suggested that the state works with the CMS more closely to ensure that all payments are correctly reported each quarter. The Louisiana DHH must also revise the method of calculating patient volumes and inform hospitals of the actual formula.

In July 2014, Ruth Kennedy, director of Louisiana Medicaid, wrote a letter to the OIG stating that she agrees with the audit's findings and that the state agrees to refund the federal government the $1.75 million in overpayments, the Times-Picayune reported. She added that the state's Medicaid service has made significant administrational changes to its EHR Incentive Program since the audit has been completed and it has hired an independent auditor to review all future payments.