Probe finds U.S. e-health program lacks oversight

Inspector general says physician and hospital self-reporting rule is ineffective

Federal investigators Thursday released a report charging that the Medicare electronic medical records (EMR) program lacks effective fiscal oversight.

The report, issued by the Inspector General's office of the Department of Health and Human Services (HHS), states that the Medicare EMR program may be paying incentives to health care providers and hospitals that do not fully meet the quality standards known as " meaningful use".

The report stated that the program's self-reporting format lacks audit oversight requirements so it's impossible to prove whether reports from physicians and hospitals are accurate.

The U.S. Centers for Medicare & Medicaid Services (CMS) oversees the federal EHR program, including the incentive payments. The "incentive money" CMS pays to healthcare professionals and hospitals that have deployed EMRs and have met meaningful use criteria is funded by the American Recovery and Reinvestment Act of 2009.

The total cost for the EMR incentive program is expected to hit $22.5 billion over the next decade, according to the latest estimate of the U.S. Office of Management and Budget.

Physicians and other qualified healthcare workers can receive up to $44,000 apiece in incentive payments while hospitals are eligible for base payments of $2 million a year.

The incentive monies can be awarded under Medicare and Medicaid programs.

Medicare EHR incentive payments of about $4 billion to 82,535 healthcare professionals and 1,474 hospitals have been made since the program started in May, 2011, according to the Inspector General's report.

In total, CMS has dispensed more than $7.7B in incentive payments to more than 307,000 healthcare professionals and 4,000 hospitals that deployed EHRs, the report said.

The CMS responded to the report by stating that protecting taxpayer dollars is a "top priority."

"We have implemented aggressive procedures to hold providers accountable. Making a false claim is a serious offense with serious consequences and we believe the overwhelming majority of doctors and hospitals take seriously their responsibility to honestly report their performance," the spokesman told Computerworld via email.

In a a report last year, The Center for Public Integrity, a nonprofit investigative journalism organization, said the first incentive payments under meaningful use criteria to facilities that had implemented EHRs were made long before the program was in place.

The findings in the new report are based on audits of so-called EMR meaningful use "attestations." Eligible professions and hospitals either attest to the meaningful use of EMRs or designate designate a third party to register and attest on their behalf.

The Inspector General's report criticized the "self reporting" requirement in the EMR program because it lends itself to prepayment problems. The report concluded that CMS does not verify the accuracy of self-reported information prior to payment because data necessary for verifications are not readily available.

CMS also does not direct high-risk professionals and hospitals to submit supporting documentation for prepayment review, the report stated. The report also stated that Medicare should be able to review at least some payments before they are made to determine whether the hospitals and doctors are qualified.

"Absent changes to the definition of meaningful use, CMS should consider ways to strengthen its program," the Inspector General's report states. "Currently, CMS has not implemented strong prepayment safeguards."

The report recommends that CMS use risk analysis techniques to select post payment audits of healthcare professionals and hospitals that may be receiving payments before actually meeting meaningful use standard.

Responding to the report, Marilyn Tavenner, acting administrator for Medicare, said she doesn't believe a prepayment audit is currently necessary.

A prepayment audit could significantly delay payments to providers who have already paid out millions to deploy EMRs, Tavenner said.

Instead, she said a "batch" reporting mechanism that will allow healthcare providers to submit a report generated by their EMR for all of a group's individual healthcare providers is being implemented.

"CMS has implemented a number of prepayment verification edits to ensure that providers are eligible to participate in the Medicare EHR Incentive Program. In addition, CMS validates all of the EHR certification numbers that are provided by providers," Tavenner wrote in a letter responding to the report.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His e-mail address is

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Copyright © 2012 IDG Communications, Inc.

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