Report finds holes in state oversight of Medicaid incentives

Several states are at risk of paying millions of dollars in Medicaid incentives to hospitals and doctors' offices that they might not be eligible for, according to a new government report.

The early review by the Department of Health and Human Services Office of Inspector General found that 12 out of 13 states did not plan to verify all the eligibility requirements for incentive payments tied to the adoption of electronic heath records. The 2009 recovery act set aside $13.4 billion for the Medicaid incentive program between 2011 and 2019.

"Depending on the eligibility requirement, States may have none, some, or all of the data they need to conduct a complete verification," the OIG report states. "Most States do not plan to start collecting all of the necessary data because the effort would be resource intensive and not logistically practical for most States. States cannot conduct complete verifications for eligibility requirements without the necessary data."

The review looked at 13 states that had approved Medicaid EHR incentive program plans as of Jan. 14. All the states said they plan to verify more than half of the eligibility requirements, with Kentucky as the only one vowing to verify all 11.