In Reversal, CMS Audits EHR Bonus Winners Before Payment

April 08, 2013

After panning the idea last fall, the Centers for Medicare & Medicaid Services (CMS) has begun auditing between 5% and 10% of physicians who qualify for a Medicare bonus for meaningful use of an electronic health record (EHR) system before they ever receive a check.

The new audit, which comes on top of double-checking a similar percentage of physicians after they receive the bonus, has leaders of organized medicine grumbling about red tape and payment delays.

The complaints should come as no surprise to CMS: The agency cited those very problems when it went on record objecting to the idea of prepayment audits only 6 months ago.

"To...implement prepayment audits could significantly delay payments to providers," CMS Acting Administrator Marilyn Tavenner said in a letter last October to the Office of Inspector General (OIG) in the Department of Health and Human Services. "Requesting additional documentation from providers would also impose an increased upfront burden on providers."

Tavenner was responding to an OIG recommendation to conduct prepayment audits of EHR bonus recipients under Medicare as a way to prevent providers from receiving money they do not deserve. "CMS faces obstacles to overseeing the Medicare EHR incentive program that leave [it] vulnerable to paying incentives to professionals and hospitals that do not fully meet the meaningful use requirements," the OIG stated in a November 2012 report.

Meaningful use is shorthand for using EHRs in specified ways to improve and streamline patient care. Physicians who attest to it can receive up to $44,000 over the course of 5 years through Medicare or up to $64,000 over the course of 6 years through Medicaid (they must choose one program or the other). The OIG noted in its November 2012 report that it already had reviewed how 13 state Medicaid programs oversee their EHR incentive programs and found that "data availability" limits how well they can verify compliance with eligibility requirements. The OIG also stated that it is conducting a series of audits of EHR incentive payments under both Medicare and Medicaid to check the accuracy of what physicians and hospitals are reporting on their meaningful use.

Remember This Name: Figliozzi

Last summer, as a CMS contractor, the accounting firm Figliozzi & Co in Garden City, New York, began auditing physicians and hospitals that had already received a Medicare EHR bonus. The providers were asked to supply certain documents within 2 weeks that would verify information previously reported to CMS on requirements such as having certified software, prescribing electronically, using drug interaction alerts, and maintaining medication lists.

Earlier this year, CMS announced that Figliozzi also would audit between 5% and 10% of physicians and hospitals that attest to meaningful use starting in January on a prepayment basis. The CMS contractor would select some providers on a random basis and others based on "suspicious or anomalous data." CMS said Figliozzi would contact these providers by email and specify what back-up documents they needed to share.

Physicians, CMS stated, should retain back-up documents that support their previously submitted meaningful use data for 6 years. Any back-up document is fair game for Figliozzi to request. In addition, physicians should be prepared to capture dated screenshots — copies of what appears on a computer screen — that document, for example, a test exchange of patient data with another clinician or any other software function that Figliozzi wants to verify.

After an initial review of the submitted documents, Figliozzi may request additional information and even visit a physician office or hospital to see a demonstration of its EHR system, according to CMS.

If Figliozzi determines that a healthcare provider did not meet CMS meaningful use requirements after all, CMS will kill the bonus, the agency said. Furthermore, CMS may take legal action against providers that fraudulently attempted to collect the money.

"A Great Deal of Angst"

The CMS decision to audit EHR bonus winners before the check is in the mail has provoked an "ouch" from organized medicine.

"We are disappointed that CMS has now chosen to adopt a prepayment audit strategy, given it previously opposed this," Ray Stowers, DO, president of the American Osteopathic Association (AOA), told Medscape Medical News. "This will cause a great deal of angst to an already overwhelmed physician community."

Postpayment audits in theory are tolerable for Jason Mitchell, MD, director of the Center for Health Information Technology at the American Academy of Family Physicians (AAFP). Dr. Mitchell told Medscape Medical News that doing audits on the back end is the usual way that the government ensures it is not throwing away money. He favors making attestation to meaningful use simple enough "so it's not a barrier to participate, and then following up with a small [audit] sample to make sure the letter of the law is followed."

Prepayment audits are not so tolerable.

"Nobody's happy except CMS and the auditors," said Dr. Mitchell. "This is another level of effort that goes into getting this money [after physicians] have already done what was initially required.

"Any kind of audit brings increased stress. It's detracting from the time that you're focusing on patient activities."

Both Dr. Mitchell and the AOA's Dr. Stowers also contend that CMS is auditing too high a percentage of EHR bonus winners on both the prepayment and postpayment sides. With the target being between 5% and 10% for each group, CMS could theoretically scrutinize up to 20% of physicians who initially qualified for the incentive payment. Dr. Mitchell said a target of less than 5% for the 2 groups combined would be reasonable.

Finally, Dr. Mitchell and Dr. Stowers note that physicians selected for an audit should receive a more substantial form of notification than an email, which could escape attention in a flood of messages or get caught in a spam filter. Dr. Stowers prefers a certified letter.

An Agency Under Pressure

CMS has not publicly stated why it commenced the prepayment audits of EHR bonus winners after arguing against the idea. When asked on April 4 to explain the decision, a CMS spokesperson told Medscape Medical News that the agency might issue a response by April 8, but none was forthcoming.

What is clear is that CMS has been under pressure to tighten things up. Last fall, when the OIG recommended prepayment audits, Republican lawmakers were already shining a harsh waste-and-abuse spotlight on the EHR incentive program. Congressional concerns ranged from inadequate meaningful use standards and a lack of software interoperability to physicians using EHRs to inflate claims for evaluation and management services.

The OIG did not back down from its recommendation for prepayment audits after CMS aired its objections. Sen. Tom Coburn, MD (R-OK), faulted CMS for the position it took when he opined last fall that the OIG report helped justify more Congressional oversight of the EHR incentive program.

"Troublingly, CMS did not agree with the OIG's recommendation that CMS first 'obtain and review supporting documentation from selected professionals and hospitals prior to payment to verify the accuracy of their self-reported information,' " Sen. Coburn stated on his Senate Web site.

The AAFP's Dr. Mitchell notes that the prepayment audits have the effect of helping Uncle Sam cope with the automatic, across-the-board budget cuts called sequestration that are roiling the country.

"It delays the amount of money the government is paying out," he said. "It keeps it in their coffers longer. It may be a way to deal with the sequestration until [Congress] finds some resolution."

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