Massachusetts’ Medicaid program made incorrect electronic health record incentive payments to 19 hospitals totaling $3.3 million, according to the Department of Health and Human Services Office of Inspector General.

Medicaid made both overpayments and underpayments, for a net overpayment of $2.1 million. The agency overpaid 13 hospitals a total of $2.7 million and underpaid six hospitals a total of $564,000. In addition, the state agency did not report two hospital incentive payments to CMS's National Level Repository (NLR).

“The state agency did not always pay EHR incentive payments in accordance with federal and state requirements,” finds the OIG. “Additionally, the state agency did not report two hospital incentive payments to the NLR. These errors occurred because state agency instructions on the hospital incentive payment calculations lacked needed information.”

OIG recommended that the Massachusetts agency refund to the federal government $2.1 million in net overpayments made to the 19 hospitals; adjust the 19 hospitals' remaining incentive payments to account for the incorrect calculations, which will result in future cost savings of $1.7 million; review the calculations for other hospitals not reviewed to determine whether payment adjustments are needed, review supporting documentation for the numbers provided in the cost reports, and refund any overpayments identified.

The Government Accountability Office has identified improper incentive payments as the primary risk to the EHR incentive programs, which may be at greater risk of improper payments than other programs because they are new and have complex requirements. The Congressional Budget Office estimates that from 2011 through 2019, spending on the Medicare and Medicaid EHR incentive programs will total $30 billion, with the Medicaid EHR incentive program accounting for more than a third of that amount—about $12.4 billion.

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