Audit finds billions in unverified Medicare spending

November 29, 2012

Medicare has paid doctors and hospitals billions of dollars to switch from paper to electronic health records without verifying that the new systems meet required quality standards, according to a federal audit released Thursday.

The funds, which total $4 billion, have been distributed since 2011 under an incentive program aimed at encouraging various types of medical providers to computerize their record-keeping systems.

The report by the inspector general of the Department of Health and Human Services identified a range of ways that the program is vulnerable to fraud, and recommended that the Obama administration introduce stronger safeguards.

The program was adopted by Congress as part of the 2009 economic stimulus package, and is expected to distribute a total of $6.6 billion before it expires in 2016. Doctors can get grants of up to $44,000; hospitals can receive about $2 million.

However, to qualify, providers must “meaningfully use” the technology to improve health care in accordance with a detailed set of criteria — employing it to update immunization registries, for instance, or to issue prescriptions electronically.

The inspector general found that Medicare officials are not requiring providers to prove that they are engaging in such meaningful use.

Officials at the Centers for Medicare and Medicaid Services countered that performing such reviews before compensating providers would unduly delay the payments.

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