Waste or Haste? Electronic Health Record Payments Under Scrutiny

A new critical report from the Inspector General of Health and Human Services shows just how difficult it is for the feds to move fast on spending programs and still look out for taxpayer dollars.

  • Share
  • Read Later
Jay Mallin / Bloomberg via Getty Images

Big government sometimes moves too slowly and with too much red tape to be effective. A new highly critical report from the Inspector General of Health and Human Services shows just how difficult it is for the feds to move faster on spending programs and still look out for taxpayer dollars.

The IG report, released Thursday, concerns some $7 billion in sweetener payments the Centers for Medicare and Medicaid Services (CMS) are handing out to doctors and hospitals that adopt electronic health records (EHR). This incentive program is funded by the HITECH Act, part of the 2009 stimulus bill, which is intended to bring the U.S. health care system more technologically in line with other business sectors like banking and retail. Widespread, if not universal, adoption of EHR systems is job No. 1 if the federal government is to succeed at implementing many of the ideas in Obamacare designed to reduce the growth of health-care spending. It may seem staggering that the U.S. health care system was not already organized electronically by 2009, but paper charts and illegible hand-written prescriptions persisted. This happened partly because upgrading to from paper to EHR is very expensive; hence, the sweetener payments from the feds that are supposed to blunt this cost.

The problem the IG pointed out in his new report is that CMS, in an effort to speed up adoption of EHR on a national basis, didn’t verify the information doctors and hospitals self-reported about how their EHR systems function. CMS took this reporting at face value, which the IG says leaves the program “vulnerable” to paying out billions in incentive payments to providers who haven’t done enough to deserve them.

(VIDEO: TIME Explains: Obamacare’s ‘Health Panel’)

The incentive payments to doctors and hospitals who get on the EHR bandwagon are supposed to be paid only to health care providers that show they are actually using their EHR systems to change the way they do business. In other words, doctors and hospitals can’t just digitize patient records and get a check from the government – they are supposed to realize some of the potential of EHR, which experts say can dramatically reduce waste and errors and improve patient outcomes. The federal government calls this “meaningful use” of EHR and it’s pretty smart policy. “Meaningful use” means the federal government will pay doctors and hospitals for doing better, but won’t reward token electronic changes that create a boon for vendors selling EHR systems while doing little for patients and overall U.S. health care spending.

Right now, the meaningful use guidelines are pretty easy to meet. A provider must have a credible EHR system in place that can document patient visits and medications. Providers also must have some of their patients accessing records electronically and use tools within their EHR systems to guide care toward accepted clinical guidelines. As the government phases in more criteria over the next several years, doctors and hospitals will have to measure a lot more patient outcomes and share health information with other health care providers in order to be eligible for funding. (The meaningful use program only applies to hospitals and doctors with Medicare or Medicaid patients.) The final phase of “meaningful use” criteria, which is years away and hasn’t been fully defined yet, will require doctors and hospitals to measure even more health outcomes and show that they are truly improving care while being more efficient.

(MORE: Health Care Spending Levels Off: Temporary Blip or Start of a Trend?)

There’s a lot of work to be done in this area, which is probably why CMS rushed ahead with incentive payments without investigating whether providers were using their EHR systems in “meaningful” ways. The IG recommended that CMS “obtain and review supporting documentation from selected professionals and hospitals prior to payment to verify the accuracy of their self-reported information.” But CMS told the IG that “prepayment reviews would increase the burden on practitioners and hospitals and could delay incentive payments.” In other words, it appears that CMS felt as though rapid and widespread adoption of EHR was important enough to bypass strict oversight and, in the process, accept the risk that some incentive payments would be wasted.

The IG report is pretty harsh, but there’s no proof in it of widespread fraud or misuse of taxpayer money. Rather, the IG says the risk of abuse is present–and that it’s an important concern at such an early stage. As the meaningful use guidelines get meatier in the coming years, more oversight will be needed. Without better tracking and auditing, billions in taxpayer money could go down the toilet. But something far worse could result if CMS doesn’t eventually independently verify what providers say they are actually doing with EHRs at the bedside, in the doctor’s office and in their billing departments. Absent this, the promise of a cheaper, more efficient and higher quality U.S. health care system could remain a fantasy.

MORE: What the Health Care Decision Means for the Country