EHR Incentive Program: Hurt By Poor Checks, Balances?

Department of Health and Human Services finds states are unable to gather information tied to Medicaid electronic health record payment eligibility.
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The Department of Health and Human Services (HHS) office of the inspector general has found that state Medicaid agencies are limited in their ability to verify self-reported eligibility information prior to issuing payments under the Medicaid electronic health record (EHR) incentive program, and that this lack of reporting could harm the integrity of states' EHR incentive payments.

While the Centers for Medicare and Medicaid Services (CMS) does not require states to verify self-reported eligibility information prior to payment, the implication that not doing so could undermine the integrity of their incentive payments was addressed in a memo dated July 15th to CMS administrator Donald Berwick.

The memo, which outlined the preliminary findings of a report, "Early Review of States' Planned Medicaid Electronic Health Record Incentive Program Oversight," noted that all 13 states that were part of the study said they plan to verify at least half of the eligibility requirements prior to making EHR incentive payments. Under the Medicare and Medicaid EHR Incentive Programs, eligible hospitals and physicians can apply for incentive payments if they have installed EHRs and met Meaningful Use requirements.

State Medicaid officials said that they plan to compare self-reported eligibility information to other data sources as a way to verify eligibility requirements, but the report found that states are unable to obtain the necessary data, which limits them from completely validating the number of eligibility requirements prior to payment.

The memo that was penned by Stuart Wright, deputy inspector general for evaluations and inspections, outlined the difficulties states have in gathering the necessary data. "Depending on the eligibility requirement, states may have none, some, or all of the data they need to conduct a complete verification. Most states do not plan to start collecting all of the necessary data because the effort would be resource-intensive and not logistically practical for most states. States cannot conduct complete verifications for eligibility requirements without the necessary data," Wright wrote.

As of June 30, 2011, 13 states had paid over $166 million in incentive payments. To receive these payments, healthcare practitioners and hospitals must meet certain eligibility requirements, as defined in the Health Information Technology for Economic and Clinical Health (HITECH) Act and CMS regulations.

Only certain types of healthcare practitioners and hospitals may receive incentive payments from states. These are:

-- Eligible healthcare practitioners such as physicians, dentists, certified nurse midwives, nurse practitioners, and physician assistants (PA) practicing in federally qualified health centers (FQHC) or rural health centers (RHC) that are led by PAs. Practitioners must not be hospital-based (i.e., must not have 90% or more of their Medicaid patient volume in a hospital inpatient or emergency department setting).

-- Eligible hospitals such as children's hospitals and acute care hospitals with an average length of stay of 25 days or less. Acute care hospitals must have at least 10% Medicaid patient volume.

-- All practitioners and hospitals must also meet defined patient volume percentage requirements. Practitioners must have at least 30% Medicaid patient volume (20% for pediatricians). If, however, a practitioner is practicing predominantly in an FQHC or RHC, then the practitioner can be eligible by having at least a 30% needy individual patient volume, the memo states.

However, many states are facing barriers to collecting data to fulfill the reporting requirements. For example, the preliminary report found that:

-- Ten states do not plan to verify prior to making payments whether practitioners who are practicing predominantly at an FQHC or RHC have at least a 30% Medicaid patient volume. One barrier is that some states reported that practitioners' needy patient volume and total patient volume are not reflected in states' Medicaid Management Information Systems (MMIS) and states do not otherwise regularly collect this information.

-- Nine states do not plan to verify whether PAs practice at PA-led FQHCs or RHCs prior to payment.

-- Eight states do not plan to verify whether practitioners and hospitals have actually adopted, implemented, or upgraded EHRs prior to payment.

-- Almost all states reported plans to partially verify practitioners' Medicaid patient volume percentages because only some of the necessary data are available.

The memo concluded by warning: "States should take these limitations into account when planning their program oversight. For example, states could strengthen oversight of their EHR incentive programs by focusing post-payment audits on eligibility requirements that cannot be completely verified prior to payment. Additionally, states that have not yet started their EHR incentive programs should note the potential inaccuracies in using MMIS claims data to verify Medicaid patient volume that we highlight in this report, and plan accordingly when designing prepayment verifications."

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