Texas Medicaid providers receive more than $15M in MU overpayments

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Incorrect Meaningful Use payments totaling $15.3 million have been paid to Medicaid providers in Texas, according to a report from the Department of Health and Human Services' Office of Inspector General (OIG).

All 45 hospitals that received an incentive payment of at least $1.5 million from the Texas Health and Human Services Commission—one of the largest payers of Meaningful Use incentives—were audited. 

The commission made incorrect payments to 38 of the 45 hospitals. It overpaid 26 hospitals by $13.9 million and underpaid 12 hospitals by $1.4 million, with net overpayments of $12.5 million. Hospital calculation is computed once and then paid out over three years, so payments made after Dec. 31, 2014, also will be incorrect. Adjustments to those payments total $163,201.

"The state agency instructed hospitals not to include inpatient nonacute-care services in the calculation but did not ensure that hospitals removed these services from their calculations," the report found.

The commission "followed CMS's general guidance on cost report data elements suggested for use when calculating a hospital incentive payment," but it failed to follow federal guidance, "which says that certain items [e.g., nursery, rehabilitation, psychiatric, and skilled nursing facility services; unpaid Medicaid services; and bad debts] should be excluded from the data elements when the hospital incentive payment is calculated."

The commission also failed to "review supporting documentation for the numbers provided in the cost reports that were used to calculate incentive payments or use the correct cost report periods."

OIG recommended the commission refund the $12.5 million in net overpayments paid to the 38 hospitals, review its calculations of the hospitals in Texas that were not audited, and provide guidance to hospitals regarding what should be included in their Meaningful Use calculations.