"Meaningful" Errors Require Hospital System To Refund $31M

In what is reported to be the largest repayment to date involving "meaningful use" incentive payments, Naples, Florida-based Health Management Associates, Inc. ("HMA"), with 71 inpatient facilities in 15 states, including Florida, recently voluntarily notified the Centers for Medicare and Medicaid Services ("CMS") that it erroneously certified its electronic health record ("EHR") technology in the amount of $31 million dollars. Upon promptly reporting the error, HMA repaid the overpayment to CMS, and it is still in the process of repaying appropriate state agencies.

According to a recent SEC filing, after an internal review, HMA determined that it "had made an error in applying the requirements for certifying its EHR technology" and, as a result, 11 of its hospitals did not, in fact, meet the criteria to qualify for the incentive payments they received between July 2011 and June 2013. Additionally, on October 30, 2013, HMA withdrew the 11 hospitals from the incentive program, although it plans to re-enroll them later and perhaps recoup some of the $31 million.

Because of this payment to CMS, HMA concluded that its financial results for the fiscal year ended December 31, 2012 as well as the fiscal quarters ended March 31, 2013 and June 30, 2013, and reports generated during this period by HMA's independent registered accounting firm should not be relied upon.

The Office of Inspector General for the Department of Health and Human Services previously announced plans to audit providers who received incentive payments to adopt EHR technology. Providers that participate in these programs have reported receiving audit notices requesting, among other things, screen shots taken at the time of the provider’s attestation of compliance. Providers who fail to provide the requested documentation run the risk of receiving a demand that all monies be immediately repaid. Given the increased government scrutiny, recipients of EHR incentive payments should conduct their own internal audits, as HMA did.

While HMA's discovery of its erroneous certifications may amount to the largest identified overpayment of "meaningful use" funds since the inception of the program, it surely will not be the last. A provider that discovers that it may have received "meaningful use" funds based on erroneous certifications should immediately seek guidance from counsel experienced in the program to discuss the appropriate course of action.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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