Washington has set about the task of spending billions of dollars to modernize the healthcare system by moving medical records from paper to electronic. Too bad federal officials have been lax in their oversight of the program opening the door to abuse and misuse.

A new federal watchdog review finds that the Centers of Medicare and Medicaid Services (CMS) mistakenly paid out $729 million to doctors, dentists, chiropractors and other medical professionals as part of an incentive program to digitize medical records.

The incentives program was an Obama-era giveaway to the health sector enacted as part of the 2009 stimulus bill. In its first year, over 140,000 professionals registered to participate with possible payments for up to five years.

When the Office of the Inspector General (IG) for the CMS conducted a review of the $6.1 billion program from 2011 to 2014, it sampled the program and found that out of 100 participants, 14 were given inappropriate payments totaling $291,000. Based on those sample results, they estimated that about 12 percent of CMS payments were inappropriate.

Program participants had not met requirements, but federal health administrators were also lax in their oversight of the program which left the program “vulnerable to abuse and misuse.” Another major problem was double-dipping as program participants switched between Medicare and Medicaid programs.

The IG recommends going after those doctors for every penny of our $729 million and to make changes to prevent future abuse and errors:

  • recover $291,222 in payments made to the sampled EPs who did not meet meaningful use requirements,
  • review EP incentive payments to determine which EPs did not meet meaningful use measures for each applicable program year to attempt recovery of the $729,424,395 in estimated inappropriate incentive payments,   ?
  • review a random sample of EPs’ documentation supporting their self-attestations to identify inappropriate incentive payments that may have been made after the audit period,
  • educate EPs on proper documentation requirements,
  • recover $2,344,680 in overpayments made to EPs after they switched programs, and
  • employ edits within the NLR system to ensure that an EP does not receive payments under both EHR incentive programs for the same program year. 

Finally, as CMS implements MACRA, we recommend that any modifications to the EHR meaningful use requirements include stronger program integrity safeguards that allow for more consistent verification of the reporting of required measures so that CMS can ensure that EPs are using EHR technology consistent with CMS’s goal of Advancing Care Information under MIPS. 

CMS has agreed to go after the overpayments and inappropriate payments, but claims that they have implemented measures to “strengthen program integrity.” However, those changes are still not catching the errors the IG found in this report.

Modenrizing health records systems is a forward-looking effort to boost efficiency, lower costs, and ensure that health professionals have access to the information they need to better treat patients. The problem here is beliving that Washington is best equipped to make that happen. President Obama pushed this program to spend billions of taxpayer dollars as part of the infrastructure for Obamacare. Some have also questioned this program entirely because it has the impact of limiting the development of health records technology.

This is yet another example of a federal program that expanded the reach of Washington, but lacked the proper management to ensure good stewardship and systems in place to prevent abuse and misuse.