OIG Report: CMS Made Nearly $100 Million in Incorrect EHR Incentive Payments

A December 16 report by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) estimated that the Centers for Medicare & Medicaid Services (CMS) made tens of millions of dollars of inflated Medicare electronic health record (EHR) incentive payments over a four-year period. OIG examined a sample of 99 payments made to acute-care hospitals from January 2013 through September 2017 and found that 50 were at least partially incorrect. OIG then extrapolated from the sample to estimate that about $93.6 million of incorrect incentive payments were made during the audit period.

OIG found that Medicare Administrative Contractors (MACs) failed to review hospitals’ supporting documentation to identify errors in their cost-report numbers on which the incentive payments were based, and CMS failed to include labor and delivery services in the incentive payment calculations. OIG recommended that CMS instruct the affected hospitals to investigate and return any overpayments, both within and outside the audit period, and instruct MACs to review all hospitals’ supporting documentation to locate errors. OIG also recommended that CMS recalculate incentive payments to take into account labor and delivery inpatient bed-days.