CMS Audit Rattles EHR Bonus Recipients

July 27, 2012

July 27, 2012 — The US Centers for Medicare and Medicaid Services (CMS) is auditing — and rattling — an unspecified number of physicians and hospitals that have been awarded hefty incentive payments for meaningful use of electronic health record (EHR) technology.

The audited providers are receiving letters from a CMS contractor asking that they submit extra documentation within 2 weeks to support their claims that they met federal meaningful-use criteria. CMS will recoup bonuses from those who turn out not to have deserved the payments.

Although the audit is rather perfunctory, it has shaken up some providers who were caught off-guard, said attorney Joshua Freemire, whose law firm represents some of the physicians and hospitals that have received the letters.

"There appears to have been no advance announcements about the audit," said Freemire, an attorney at the Baltimore, Maryland, office of Ober/Kaler. "Some of our clients wondered if the letters were genuine, and if they should respond."

Freemire told Medscape Medical News that with past CMS audits of various kinds, the agency has given advance notice to the healthcare provider community and explained the audit's purpose and how many providers would be subject to it. "So when someone was audited, there wasn't panic or confusion," he said.

At the same time, physicians and hospitals should have known from the beginning of the incentive program that audits were theoretically possible, Freemire said. CMS is obligated to double-check that only deserving parties receive taxpayer dollars.

A section of the CMS Web site on the EHR incentive program addresses the subject of audits and advises providers on how to prepare for them. An Internet archive program indicates that this material was first posted online in March 2011.

The CMS contractor conducting the meaningful-use audit is Figliozzi & Company, a certified public accountant firm in Garden City, New Jersey. According to records posted on a federal Web site called Federal Business Opportunities, Figliozzi was awarded its contract in April. CMS is to pay the firm no more than $3,132,609.

A Frequently Asked Questions (FAQ) page on the CMS Web site states that Figliozzi & Company will audit individual clinicians who earned meaningful-use bonuses in the course of treating Medicare and Medicare Advantage patients. The firm also will audit bonus-winning hospitals serving Medicare patients and "dual eligibles" enrolled in both Medicare and Medicaid.

Letters from Figliozzi & Company will feature the CMS logo. CMS spokesperson Joe Kuchler said the agency submitted this FAQ information for posting in late June, about the same time that Figliozzi & Company began to mail audit letters to providers.

Some Providers Chosen Randomly, Some Not

The EHR incentive program, created by the economic stimulus legislation of 2009, awards up to $44,000 over 5 years under Medicare or up to $64,000 over 6 years under Medicaid to clinicians who use EHRs in specified ways to improve and streamline patient care.

Beginning in 2011 and through May 2012, CMS has awarded $5.8 billion in meaningful-use bonuses to providers, including $1.5 billion to roughly 82,000 physicians.

The attorney Freemire said the audit letter from Figliozzi & Company asks for 4 types of information that back up what providers reported to CMS to obtain their bonuses.

  • A copy of a document from the US Department of Health and Human Services that certifies the provider's EHR technology as eligible for the incentive program.

  • Documentation of reported emergency department admissions, a key number in calculating whether the provider met certain meaningful-use requirements.

  • Supporting documentation for a provider's claims to have satisfied mandatory meaningful-use objectives and measures, such as electronic prescribing.

  • Supporting documentation for a provider's claims to have satisfied voluntary meaningful-use objectives and measures.

Freemire said that the audit letter could have been more specific about the requested information. Nevertheless, he does not believe complying with the letter will be "terribly difficult," especially for physician practices with well-organized records.

The CMS Web site states that audited providers can pose questions to Figliozzi & Company by calling 516-745-6400 or emailing

Freemire characterizes the meaningful-use audit as "wide and shallow."

"We get the impression that a wide swathe of providers is getting letters," Freemire said. "They don't seem targeted and focused."

CMS spokesperson Joe Kuchler told Medscape Medical News that the agency is not disclosing the number or percentage of bonus recipients being audited. Providers were chosen "using various methods, including a risk-assessment process and other methods, such as random selections." Specific information about a provider also may trigger an audit, he added.

Physicians should not panic if an audit letter arrives in the mail, Freemire said. "Just identify the records and provide them."


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