Medicaid EHR Incentive Reconciliation: The Refund Missing From the Federal Claim

Medicaid EHR incentive duplicate payments and reconciliation come down to three records: what the state paid and recovered, what it claimed from the federal government, and what the national payment history received. In its September 2015 Oklahoma audit, the Department of Health and Human Services’ Office of Inspector General found that the state recovered six duplicate payments but left the recoveries off its federal expenditure reports, claiming $127,500 more than it paid. If you worked on payment processing, finance or data transmission, you may recognize the problem: one part of the system had corrected the payment while another still carried the wrong amount.

Three Records for the Same Government Money

Reconciliation compared the state’s actual payments with its federal expenditure report and the National Level Repository. Each answered a different question about the same government money, with the Centers for Medicare & Medicaid Services relying on state reporting for reimbursement and duplicate-payment checks.

Medicaid electronic health record incentive payments supported eligible health care providers adopting, implementing, upgrading or meaningfully using certified technology. Professionals could qualify through adoption, implementation or upgrade in the first year. Later years required meaningful use. The provider’s attestation addressed eligibility, while reconciliation followed the payment. The Medicaid program ended on December 31, 2021.

States claimed EHR incentive payments on lines 24E and 24F of the CMS-64.10 Base section of Form CMS-64. The quarterly report had to reflect actual expenditures supported by documentation. For these EHR incentives, the federal government paid 100% of the incentive payments. A recovered payment left on the report still counted toward the federal claim.

Oklahoma Recovered the Payment but Kept It on the Federal Report

Oklahoma’s error survived because the recovery did not reach the federal expenditure report. The inspector general reviewed professional incentive payments for program years 2011 and 2012.

The Oklahoma Health Care Authority paid the incentives twice and reported the duplicate disbursements as expenditures. It then recouped the extra payments but failed to record the recoveries on the federal report.

The state had its money back, but its federal claim still counted the spending. We call that an absurd bit of accounting: a completed recovery in the provider account had left the taxpayer’s side of the transaction unfinished.

The historical federal payment-control rule required states to detect improper payments and take corrective action. States also had to repay the federal share regardless of whether they recovered the provider’s overpayment. Getting the money back and repaying the federal government were separate obligations. Oklahoma agreed with the finding and promised to return the federal share and review its reconciliation.

A Payment Missing From the National History

Oklahoma also had a payment missing from the national history. The audit found that a $21,250 incentive payment to a professional was absent from the National Level Repository.

A state official had attempted to transmit the data and told auditors that transmissions sometimes had problems. The state missed the absent entry because it did not reconcile the expenditure report with the repository. The inspector general said the professional could have been paid by another state.

Professionals could not receive incentive payments from both Medicare and Medicaid in the same year or from more than one state. The missing transaction left a gap in the history used to enforce that restriction. Oklahoma said it had retransmitted the payment and verified receipt.

Louisiana Had a Transmission Log and Missing Payments

Louisiana’s transmission log told staff that files had been sent, while the national repository lacked the payments. In its August 2014 Louisiana audit, the inspector general found that $276,250 in incentive payments to 13 professionals had not been reported to the repository.

State officials believed the payments had been reported because they had a log noting transmission. The files had not transferred successfully, and the Louisiana Department of Health & Hospitals had not reconciled the expenditure report with the repository. The inspector general identified the consequence as a risk that another state could pay the same providers.

The state’s response described quarterly reconciliation begun in October 2013. Staff compared EHR payment records with the repository and the data sources behind the federal expenditure report, taking steps to resolve discrepancies immediately. The comparison reached the receiving system, where the transmission log had supplied false comfort.

What Payment and Finance Staff Could See

The audits connect payment records, recoveries, federal reporting and transmission. An employee at one of those handoffs may know why the next record failed to reflect the previous one.

A separate Louisiana finding shows why the payment handoff matters before reconciliation even begins. The state overpaid professionals by $3,250 because staff entering payment information did not know the first-year limit, and the system had no checks to prevent an excessive payment. Louisiana’s response said the payments went to a single payee on behalf of 13 professionals.

The state described changing that handoff after launching its EHR portal. Approved payment requests went electronically to its Medicaid fiscal intermediary, Molina, through the EHR system instead of manual Excel spreadsheets. For an employee handling those requests, the approved amount, the transmitted instruction and the resulting payment are concrete points of comparison. That is where a firsthand account can explain how an incorrect amount reached the payment system.

For a finance or service-provider employee discussing suspected electronic health records fraud, the useful knowledge is specific: which organization prepared the payment information, what the receiving system showed, and how people responded to a discrepancy. We work with you to connect that firsthand account to the government money and the decisions behind the reporting. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Where the Records Stopped Agreeing

If you worked in finance, payment administration or a service-provider business and saw a recovery disappear from the reporting, speak with our whistleblower experts about the recovery that never reached the federal claim. We use what you know about the reporting and the government money to build your strongest Medicaid whistleblower case. We bring in healthcare fraud whistleblower lawyers who understand EHR incentive payments, and we stay beside you through the whole journey.