HMA to Repay $31 Million for Improper EHR Claims HMA to Repay $31 Million for Improper EHR Claims
|In a Form 8-K filed with the SEC on November 5, 2013 , Health Management Associates, Inc. (HMA) announced that it will restate financial statements to address a repayment of $31 million the company received in EHR Incentive Payments for demonstrating "Meaningful Use" of certified EHR technology. HMA notified CMS and the relevant state programs and is in the process of repaying the funds received from both Medicare and Medicaid.HMA explained that, "[i]n October 2013, based on the results of an internal review, the Company determined that it had made an error in applying the requirements for certifying its EHR technology under these programs and, as a result, that 11 of the hospitals it had enrolled in the [federal Medicare and various state Medicaid Healthcare Information Technology (HCIT)] programs did not meet the 'meaningful use' criteria necessary to qualify for HCIT payments." As a result, HMA will be restating financial statements for the years ended December 31, 2010, 2011 and 2012 and the quarters ended March 31 and June 30, 2013 to correct the accounting treatment of the payments:
HMA also advised that the following filings and reports "should no longer be relied upon" given the errors:
- 2011 - recognized as income approximately $8.3 million
- 2012 - recognized as income approximately $17.3 million
- 2013 (first six months) - recognized as income approximately $5.4 million
HMA's story is a good reminder that Meaningful Use payment recipients, particularly those with multiple offices, must take the appropriate steps to audit use to ensure that incentives are not being claimed erroneously. CMS hired Figliozzi and Company to undertake audits on Medicare eligible professionals and eligible hospitals, as well as on hospitals that are eligible for both the Medicare and Medicaid EHR Incentive Programs. CMS made clear in an announcement in February 2013 that it expects eligible professionals, eligible hospitals, and critical access hospitals to "retain ALL relevant supporting documentation (in either paper or electronic format) used in the completion of the Attestation Module responses." How long the documentation must be retained depends on the type of documents:
- consolidated financial statements contained in
- HMA's Annual Report on Form 10-K for the fiscal year ended December 31, 2012
- the Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2013 and June 30, 2013
- all releases issued by HMA discussing its financial results for December 31, 2012, March 31, 2013, and June 30, 2013
- HMA's guidance for fiscal year 2013 issued on July 30, 2013
- Ernst & Young LLP reports dated February 27, 2013 on HMA's consolidated financial statements and the effectiveness of HMA's internal control over financial reporting
- Documents that support attestation data for meaningful use objectives and clinical quality measures - retained for six years post-attestation
- Documents that support payment calculations (e.g., cost report data) - retention period should follow the current document retention processes.
Companies should review their document retention policies to ensure that the policies are consistent with requirements. If no retention policy is currently in place, now may be the appropriate time to develop such a policy.  Health Management Associates, Inc., Securities and Exchange Commission Form 8-K, Nov. 5, 2013.
 Press Release, Health Management Associates, Inc., Nov. 5, 2013.
 CMS, EHR Incentive Program, Supporting Documentation for Audits, Updated Feb. 2013.