DEPARTMENT OF HEALTH & HUMAN SERVICES 	 Office of Inspector General 
Washington, D.C. 20201 
JUL 15 2011 
TO: 	 Donald M. Berwick, M.D. 
Administrator 
Centers for Medicare & Medicaid Services 
FROM:  Stuart Wright 
Deputy Inspector General 
for Evaluations and Inspections 
SUBJECT: 	 Memorandum Report:  Early Review a/States' Planned Medicaid Electronic 
Health Record Incentive Program Oversight, OEl-05-10-00080 
This memorandum report describes States' plans to verify that health care practitioners and 
hospitals meet program eligibility requirements for State Medicaid Electronic Health Record 
(EHR) incentive programs for 2011 and what limitations, if any, they anticipate in their 
oversight. 
SUMMARY 
The Health Information Technology for Economic and Clinical Health (HI TECH) Act, enacted 
as part of the American Recovery and Reinvestment Act (ARRA), established Medicare and 
Medicaid EHR incentive programs to promote adoption of EHRs.  An EHR system is a 
computerized recordkeeping system that contains patients' health-related information, including 
medical history. 
State Medicaid agencies (hereinafter referred to as States) administer their own Medicaid EHR 
incentive programs and are responsible for overseeing their integrity.  The Centers for Medicare 
& Medicaid Services (CMS) identified Medicaid EHR incentive program eligibility as an 
oversight priority for States' Medicaid EHR incentive programs in 2011. 
We found that all 13 States in our study reported that they plan to verify at least half of eligibility 
requirements prior to making EHR incentive payments. To verify eligibility requirements, States 
plan to compare self-reported eligibility information to other data sources.  Verifying 
self-reported eligibility information prior to making payments helps States ensure the integrity of 
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Page 2  Donald M. Berwick, M.D. 
 
 
their EHR incentive payments.  In addition, all States plan to audit eligibility requirements after 
payment. 
We also found that data availability limits both the number of eligibility requirements that States 
plan to verify prior to payment and the completeness of those verifications.  Depending on the 
eligibility requirement, States may have none, some, or all of the data they need to conduct a 
complete verification.  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. 
 
BACKGROUND 
 
The HITECH Act, enacted as part of ARRA, established EHR incentive programs for both 
Medicare and Medicaid to promote adoption of EHRs.1   Between 2011 and 2019, the Federal 
Government will spend an estimated $20.6 billion on the Medicare and Medicaid EHR incentive 
programs$7.2 billion for the Medicare EHR incentive program and $13.4 billion for the 
Medicaid EHR incentive program.2 
An EHR system is a computerized recordkeeping system that contains patients health-related 
information, including medical history.  Among other functions, EHR systems have the capacity 
to provide clinical decision support, which helps practitioners make evidence-based treatment 
decisions.3 
Medicaid EHR Incentive Programs 
States oversee their own Medicaid EHR incentive programs (hereinafter referred to as EHR 
incentive programs) and make incentive payments directly to health care practitioners and 
hospitals.4, 5  As of June 30, 2011, 13 States had paid over $166 million in incentive payments.6 
CMS provides enhanced Federal financial participation (FFP) to States for their EHR incentive 
programs.  CMS provides 100 percent FFP to States for the cost of incentive payments made to 
health care practitioners and hospitals and 90 percent FFP for administrative expenses and 
planning activities related to the EHR incentive program.7  For example, a State would receive 
                                                           
1 ARRA  4101 and 4201, amending Titles XVIII and XIX of the Social Security Act. 
2 CMS Justification of Estimates for Appropriations Committees, Fiscal Year 2012.  Accessed at www.cms.gov on July 5, 2011. 
3 Clinical decision support is contained in an interactive computer program or application that helps health care practitioners 
make treatment decisions for better patient care.  Clinical decision support could provide a range of assistance, such as patient 
management best practices and clinical research findings. 
4 States are not required to create Medicaid EHR incentive programs. 
5 Health care practitioners and hospitals refer to Eligibile Practitioners (EP) and Eligible Hospitals (EH), respectively.  EP and 
EH are defined in 42 CFR  495.304. 
6 CMS Spotlight and Upcoming Events page.  Accessed at www.cms.gov on July 11, 2011. 
7 Social Security Act  1903(a)(3)(F)(i) and (ii). 
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90 percent FFP to create a Web-based registration system for health care practitioners and 
hospitals to use to register for incentive payments.8 
States are responsible for overseeing their EHR incentive programs and ensuring the integrity of 
incentive payments.9  Specifically, States must have an oversight plan to combat fraud, waste, 
and abuse, which includes checking that health care practitioners and hospitals are eligible for 
incentive payments.10 
States must submit their oversight plans to CMS, which reviews and approves them before States 
receive FFP for their EHR incentive programs.11  According to CMS, States are encouraged to 
revise their plans as they make changes to their EHR incentive programs. 
CMS has identified EHR incentive program eligibility requirements as an oversight priority for 
States EHR incentive programs in 2011.12  States must have a plan for how they will ensure that 
health care practitioners and hospitals meet EHR incentive program eligibility requirements. 
States oversight plans may include verifying eligibility requirements prior to payment or 
auditing eligibility requirements after payment. 
EHR Incentive Program Eligibility Requirements 
To receive EHR incentive payments, health care practitioners and hospitals must meet certain 
eligibility requirements, as defined in HITECH and CMS regulation. 
Only certain types of health care practitioners and hospitals may receive incentive payments 
from States.13  Types of health care practitioners (hereinafter referred to as practitioners) that are 
eligible include physicians, dentists, certified nurse midwives, nurse practitioners, and physician 
assistants (PA) practicing in federally qualified health centers (FQHC) or rural health centers 
(RHC) that are led by PAs.  Practitioners must not be hospital-based (i.e., must not have 
90 percent or more of their Medicaid patient volume in a hospital inpatient or emergency 
department setting).14  Types of hospitals that are eligible include acute care hospitals with an 
average length of stay of 25 days or less and childrens hospitals.15  Practitioners and hospitals 
must be licensed and not otherwise sanctioned from receiving Medicaid reimbursement.16 
All practitioners and hospitals must also meet defined patient volume percentage requirements.  
Practitioners must have at least 30 percent Medicaid patient volume (20 percent for 
                                                           
8 CMS State Medicaid Director Letter, August 17, 2010 (SMD# 10-016), Enclosure A.  Accessed at www.cms.gov on 
July 11, 2011. 
9 Social Security Act  1903(t)(9)(B). 
10 42 CFR  495.332(b), (c), (d), and (e). 
11 42 CFR  495.316(b) and 495.332. 
12 CMS State Medicaid Director Letter, August 17, 2010 (SMD# 10-016).  Accessed at www.cms.gov on July 11, 2011.   
13 Social Security Act  1903(t)(2) and (t)(3)(B); 42 CFR  495.304. 
14 Social Security Act  1903(t)(2)(A); 42 CFR  495.304(c); 42 CFR  495.4. 
15 Social Security Act  1903(t); 42 CFR  495.302. 
16 42 CFR  495.368(a)(1)(i); CMS State Medicaid Director Letter, August 17, 2010 (SMD# 10-016), Enclosure B.  Accessed at 
www.cms.gov on July 11, 2011. 
OEI-05-10-00080  Early Review of States Planned Medicaid EHR Incentive Program Oversight   
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pediatricians).17  If, however, a practitioner is practicing predominantly in an FQHC or RHC, 
then the practitioner can be eligible by having at least 30 percent needy individual patient 
volume.18  Acute care hospitals must have at least 10 percent Medicaid patient volume.  There 
are no patient volume requirements for childrens hospitals.19 
Patient volume percentages are calculated by dividing a specified patient volume by total patient 
volume.  For example, to calculate a Medicaid patient volume percentage, a State must divide 
Medicaid patient volume by total patient volume.  Likewise, to calculate the needy patient 
volume percentage, a State must divide needy patient volume by total patient volume.20 
Practitioners and hospitals must also adopt, implement, or upgrade certified EHRs to receive 
incentive payments.21  The terms adopt, implement, and upgrade are defined by CMS in 
regulation as follows:22 
  Adopt:  Acquire, purchase, or secure access to certified EHR technology. 
  Implement:  Install or commence utilization of certified EHR technology. 
  Upgrade:  Expand the functionality of certified EHR technology, including staffing, 
maintenance, and training, or upgrade from existing EHR technology to certified EHR 
technology. 
EHR technology is certified according to processes defined by the Office of the National 
Coordinator for Health Information Technology.23  Certification criteria require EHRs to 
accommodate certain functions, including physician order entry and electronic prescribing.24 
Finally, to receive an incentive payment, practitioners and hospitals must register for the 
incentive program in their States and attest that they meet eligibility requirements.25  To do this, 
practitioners and hospitals self-report eligibility information (e.g., patient volume, practitioner 
specialty) to the State to show that they meet each of the eligibility requirements described 
above.26 
 
                                                           
17 Social Security Act  1903(t)(2); 42 CFR  495.304(c).  
18 Social Security Act  1903(t)(2) and 42 CFR  495.304(c).  A needy individual is defined as someone who receives either 
Medicaid or Childrens Health Insurance Program (CHIP) medical assistance, receives uncompensated care, or receives care at 
no cost or on a sliding scale determined by ability to pay.  42 CFR  495.302.  Practicing predominantly in an FQHC or RHC 
means that a practitioner treats over 50 percent of his or her total patient volume over a period of 6 months in an FQHC or RHC.  
42 CFR  495.302. 
19 Social Security Act  1903(t)(2)(B); 42 CFR  495.306(f). 
20 42 CFR  495.306. 
21 Social Security Act  1903(t)(6)(C)(i); 42 CFR  495.314. 
22 42 CFR  495.302. 
23 Social Security Act  1903(t)(3).  In a July 2010 final rule (75 Fed. Reg. 44590), the Office of the National Coordinator for 
Health Information Technology specified the technical criteria that EHRs must meet to be certified. 
24 45 CFR  170.302 and 170.304. 
25 42 CFR  495.8.  Practitioners who register for the Medicare EHR Incentive program and receive a Medicare incentive 
payment are prohibited from receiving a Medicaid EHR incentive payment.  Eligible hospitals may receive both Medicare and 
Medicaid incentive payments.  See Social Security Act  1903(t)(7). 
26 42 CFR  495.312. 
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Related Office of Inspector General Work  
This study on State oversight of Medicaid EHR incentive programs is the first in a series of 
studies by the Office of Inspector General (OIG) on CMSs EHR incentive programs.  In a 
subsequent review, we will examine the Medicare EHR incentive program. 
Previously, OIG published a report reviewing States initiatives on health information 
technology and health information exchange.  OIG identified 25 States involved in planning and 
developing statewide health information exchange networks.  The report also found that nine 
States had implemented systems that allowed practitioners and hospitals to look at Medicaid 
beneficiaries claims history.27 
 
METHODOLOGY 
 
Scope 
We reviewed 13 of the 14 States that had approved Medicaid EHR incentive program plans, 
officially known as State Medicaid Health IT Plans, as of January 14, 2011.  We reviewed these 
States 2011 prepayment and postpayment oversight plans for their EHR incentive programs.  
Specifically, we focused on States oversight plans to ensure that practitioners and hospitals met 
EHR incentive program eligibility requirements.  We did not review any eligibility requirements 
or aspects of payment that CMS elected to verify on behalf of States, such as verifying that 
hospitals are an eligible hospital type or preventing duplicate Medicare incentive payments to 
practitioners. 
Data Collection and Analysis 
We collected States oversight plans and held structured interviews with CMS and State staff.  
We requested from CMS the current version of States oversight plans for the 14 States with 
CMS approval as of January 14, 2011. 
We conducted structured phone interviews with 13 of these 14 States between January and 
February 2011.  One State was unavailable for an interview so we did not include it in our final 
analysis.  In these interviews, we asked States to clarify details of their oversight plans and 
provide any recent updates to those plans.  We also asked about any anticipated limitations or 
challenges to their planned oversight. 
Finally, we interviewed CMS staff to better understand their review and approval of States 
oversight plans. 
To describe States planned oversight, we conducted document reviews of 13 States approved 
oversight plans and analyzed State and CMS structured interview data.  We analyzed States 
oversight plans and interview data to see whether States were verifying self-reported eligibility 
                                                           
27 OIG, State Medicaid Agencies Initiatives on Health Information Technology and Health Information Exchange, 
OEI-02-06-00270, August 2007. 
OEI-05-10-00080  Early Review of States Planned Medicaid EHR Incentive Program Oversight   
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information prior to payment.  We defined a verification prior to payment as a States 
comparison of self-reported eligibility information to another data source prior to making an 
incentive payment.  We also reviewed States plans to check eligibility requirements after 
payment.  Table 1 shows the eligibility requirements that we included in our analysis. 
Table 1:  Eligibility Requirements Analyzed* 
Requirement  Applies to Practitioners  Applies to Hospitals 
Practitioner Type 
Practitioners must be one of the permissible practitioner types   - 
Qualifications 
Practitioners and hospitals must be licensed to practice in the State   
Practitioners and hospitals must not be excluded, sanctioned, or otherwise 
 
deemed ineligible to receive payments from the State 
Patient Volume 
Practitioners must have at least a 30% Medicaid patient volume (or 20% 
for pediatricians) if they are not practicing predominantly in an FQHC or   - 
RHC 
Practitioners must have at least a 30% needy individual patient volume if 
 - 
they are practicing predominantly in an FQHC or RHC 
Hospitals must have at least 10% Medicaid patient volume (acute care 
   
hospital only) 
Practice Location 
Practitioners must not be hospital-based   - 
If practitioner is a PA, he or she must practice in a PA-led FQHC or RHC   - 
Average Length of Stay 
Must have an average length of stay of 25 days or less (acute care hospital 
-  
only) 
Adoption, Implementation, or Upgrade of Certified EHR Technology 
Practitioners and hospitals must adopt, implement, or upgrade an EHR   
Practitioners and hospitals must have certified EHR technology   
Source:  OIG analysis of CMS Regulations, 2011. 
*These represent the subset of eligibility requirements for which States have primary responsibility. 
 
Limitations 
This study reports on States oversight plans, which may change as States implement them.  We 
did not verify the accuracy of States reports regarding the availability of data. 
Standards 
This study was conducted in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
 
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RESULTS 
 
All 13 States Reported That They Plan To Verify at Least Half of Eligibility Requirements 
Prior To Making EHR Incentive Payments 
Thirteen States reported that they plan to verify self-reported eligibility information for at least 
half of eligibility requirements prior to payment.  States compare self-reported eligibility 
information to other data sources to verify an eligibility requirement.  Although CMS does not 
require States to verify self-reported eligibility information prior to payment, doing so helps 
States proactively ensure the integrity of their EHR incentive payments.  Table 2 shows the 
number and percentage of eligibility requirements that each State plans to verify prior to 
payment. 
Table 2:  Number of Eligibility Requirements That States 
Plan To Verify Prior to Payment 
Number of Eligibility 
Percentage of Total 
State  Requirements That State 
Eligibility Requirements 
Plans To Verify 
Kentucky  11  100% 
Alaska  10  91% 
Alabama  10  91% 
Mississippi  9  82% 
Tennessee  9  82% 
North Carolina  8  73% 
Michigan  8  73% 
Texas  7  64% 
Oklahoma  7  64% 
South Carolina  7  64% 
Iowa  7  64% 
Pennsylvania  7  64% 
Wisconsin  6  55% 
Source:  OIG analysis of State oversight plans and State interviews, 2011. 
 
In addition, all 13 States reported that they plan to audit eligibility requirements after payment.  
States reported that they are still developing their specific plans but 11 States plan to begin audits 
in 2011.  One State plans to begin audits in 2012 and another State had not decided when it 
would start its audits. 
Data Availability Limits Both the Number of Eligibility Requirements That States Plan To 
Verify Prior to Payment and the Completeness of Those Verifications 
States can only completely verify an eligibility requirement if data are available for comparison 
to self-reported eligibility information. 
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Over half of States did not report plans to verify three specific eligibility requirements prior to 
payment because necessary data are not currently collected.  These States do not have the data 
they need to verify three eligibility requirements because they do not typically collect the 
necessary data.  In the past, States did not need to collect these data for Medicaid operations.  
Further, the few States that plan to collect all the necessary data to verify these three eligibility 
requirements are doing so by contacting each practitioner or hospital, which is resource intensive 
and logistically impractical for most States.  Table 3 shows the number of States that do not plan 
to verify certain eligibility requirements prior to payment. 
Table 3:  Eligibility Requirements That Most States Do Not Plan To Verify Prior to 
Payment  
Number of  Number of  Examples of Data  Number of 
States That  States That  Sources Used for  States That 
Eligibility Requirement 
Plan Complete  Plan Partial  Complete or Partial  Plan No 
Verification  Verification  Verification  Verification 
Practitioners must have at least a 30% needy  Contact FQHC or RHC, 
individual patient volume if they are practicing  FQHC reports,  
predominantly in an FQHC or RHC                                  d  o  c u  m   e  n  t a  tion submitted                        
1   2   by practitioner  10  
If practitioner is a PA, he or she must practice 
                                     F  Q   H  C     r e  ports; contact                          
in a PA-led FQHC or RHC 
4   -   PA, FQHC, or RHC   9  
Documentation 
Practitioners and hospitals must adopt,         s u  b  m   it t e  d    b  y practitioner  
implement, or upgrade an EHR                           or hospital (e.g., receipts,                          
-  
5   vendor contract)  8  
Source:  OIG analysis of State oversight plans and State interviews, 2011. 
 
Ten States do not plan to verify prior to payment whether practitioners who are practicing 
predominantly at an FQHC or RHC have at least 30 percent needy patient volume.  To verify 
practitioners needy patient volume percentage, States need both the practitioners needy patient 
volume and total patient volume.  By definition, needy patient volume and total patient volume 
include patient volume for which Medicaid does not reimburse.  As such, some States reported 
that practitioners needy patient volume and total patient volume are not reflected in States 
Medicaid Management Information Systems (MMIS) and States do not otherwise regularly 
collect this information.28  Without practitioners needy patient volume or total patient volume, 
10 States are unable to do any verification on this eligibility requirement prior to payment.  See 
Figure A-1 in Appendix A to view the components of the needy patient volume percentage 
calculation and what data some States reported not having. 
Three States plan to seek new data sources so they can verify all or part of needy patient volume 
percentages prior to payment.  Two States plan to contact practitioners directly for supporting 
documentation of needy patient volume.  One State plans to use patient volume information in 
                                                           
28 MMIS are States Medicaid claims processing systems. 
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reports that FQHCs prepare for the Health Resources and Services Administration (HRSA).  
However, this approach may not be viable; another State reported that HRSA stated that the data 
in these reports are not usable for checking needy patient volume. 
Nine States do not plan to verify prior to payment whether PAs practice at PA-led FQHCs or 
RHCs.  States do not have data that they can use to determine this.  The remaining four States 
plan to seek out alternative data sources to verify this requirement.  Examples of alternative data 
sources include reports that FQHCs prepare for HRSA, contacting State associations for FQHCs 
and RHCs, and contacting FQHCs and RHCs directly. 
Finally, eight States do not plan to verify whether practitioners and hospitals actually adopted, 
implemented, or upgraded EHRs prior to payment.  States do not have an existing data source for 
this.  Despite this difficulty, five States plan to completely verify this eligibility requirement by 
having practitioners and hospitals submit documentation to demonstrate that they have adopted, 
implemented, or upgraded EHR technology. 
Almost all States reported plans to partially verify practitioners Medicaid patient volume 
percentages because only some of the necessary data are available.  Eleven of thirteen States 
reported that they plan only partial verifications of practitioner Medicaid patient volume 
percentages.  They plan to use Medicaid claims data in MMIS to verify self-reported Medicaid 
patient volume.  This is a partial verification because it only verifies the Medicaid component of 
the Medicaid patient volume percentage calculation.  Table 4 shows the number of States that 
plan partial verifications of this eligibility requirement. 
Table 4:  Eligibility Requirement That Most States Plan To Partially Verify Prior to 
Payment  
Number of  Number of  Example of Data  Number of 
States That  States That  Source Used for  States That 
Eligibility Requirement 
Plan  Complete  Plan Partial  Complete or Partial   Plan No 
Verification  Verification  Verification  Verification 
Practitioners must have at least a 30% 
Medicaid patient volume (or 20% for  Documentation 
pediatricians) if they are not practicing                                                   s  u  bmitted by                          
predominantly in an FQHC or RHC  1   11   practitioner  1  
Source:  OIG analysis of State oversight plans and State interviews, 2011. 
 
Five of the eleven States reported that they plan to partially verify Medicaid patient volume 
percentages because they do not have data to do complete verifications.  Complete verification of 
Medicaid patient volume percentages is only possible if States have data to verify total patient 
volume, the denominator component of the Medicaid patient volume calculation.  While five 
States reported not having total patient volume, the remaining six States likely face similar issues 
because States typically have no reason to collect total patient volume data.  States would not 
generally collect data on total patient volume because they include patient visits for which States 
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do not reimburse (e.g., private pay and uncompensated care).  See Figure A-2 in Appendix A to 
view the components of the Medicaid patient volume percentage calculation and the data some 
States reported not having. 
One State will require all practitioners to submit reports from their practice management systems 
supporting their self-reported total patient volume.  State staff will then manually review the 
submitted reports and completely verify Medicaid patient volume percentages. 
Further, most States reported that MMIS data they plan to use for their verifications of Medicaid 
patient volume may not be accurate in some cases.  These cases involve Medicaid claims for 
services reimbursed at a bundled rate and Medicaid claims in which not all of a rendering 
practitioners patient volume is reflected in MMIS claims data. 
  Six of twelve States reported that the MMIS claims data they plan to use to verify 
practitioners Medicaid patient volume prior to payment do not reflect actual patient 
volume for services reimbursed at a bundled rate.  For example, some States pay one flat 
fee to obstetrician/gynecologist (OB/GYN) specialists for all patient visits associated 
with prenatal care (i.e., a bundled rate).  While each distinct patient visit should be 
included in the OB/GYNs Medicaid patient volume, States MMIS systems only reflect 
one claim for the entire series of visits.  As a result, when a State compares MMIS claims 
to the OB/GYNs self-reported Medicaid patient volume, it may incorrectly conclude that 
the OB/GYN overreported his or her Medicaid patient volume. 
Two States reported solutions to this problem.  One plans to use an existing State 
database in which OB/GYN specialists report actual utilization data to accurately count 
the number of distinct patient visits.  Another State plans to estimate the number of visits 
associated with each payment for bundled services and to use that estimate to check 
Medicaid patient volume. 
  Ten States reported that MMIS claims data do not reflect accurate patient volume for a 
rendering practitioner (i.e., a practitioner who treats patients) who submits claims through 
a billing practitioner (i.e., a practitioner who bills Medicaid for services performed by 
rendering practitioners).  This scenario might occur, for example, when a nurse 
practitioner sees a patient, but the visit is billed by a supervising physician.  In such 
cases, a State that compares the nurse practitioners self-reported Medicaid patient 
volume to MMIS claims would underestimate the patient volume because there would be 
no claim in MMIS to represent the patient visit.  No States reported a comprehensive 
solution to the confusion between rendering and billing practitioners. 
Most States reported plans to completely verify eligibility requirements for which data are 
available.  Twelve of the 13 States reported plans to use existing data in their MMIS systems to 
perform complete verifications of certain eligibility requirements.  These 12 States plan to look 
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up specialty codes in their MMIS to verify that practitioners are eligible.  These 12 States also 
plan to verify practitioners and hospitals Medicaid enrollment status using MMIS, which 
indicates that they are not barred from receiving Medicaid reimbursements and that they have 
appropriate licensure.  The one additional State plans to reference records maintained by its 
department of health to verify that practitioners are an eligible practitioner type, and that 
practitioners and hospitals have appropriate licensure and are not barred from receiving Medicaid 
reimbursements.  Finally, 10 States plan to use place of service codes on practitioners MMIS 
claims to verify that practitioners do not have 90 percent or more of their professional services in 
a hospital inpatient or emergency room setting (i.e., practitioner is not hospital-based). 
Table 5 shows the number of States that plan to completely verify certain eligibility requirements 
and the data sources they plan to use. 
Table 5:  Eligibility Requirements That Almost All States Plan To Completely Verify Prior to 
Payment  
Number of  Number of  Examples of Data  Number of 
States That Plan   States That  Sources Used for  States That 
Eligibility Requirement 
Complete  Plan Partial  Complete or Partial   Plan No 
Verification  Verification  Verification  Verification 
Practitioners must be one of the permissible practitioner                                                                         
types  13   -   MMIS   -  
Practitioners and hospitals must be licensed to practice in                                                                        
the State  13   -   MMIS  -  
Practitioners and hospitals must not be excluded, 
 
sanctioned, or otherwise deemed ineligible to receive 
                                                                      
payments from the State Medicaid agency 
13   -   MMIS  -  
Certified Health 
Practitioners and hospitals must have certified EHR  Information 
technology  Technology (HIT) 
                                  P  r o  d  u  c  t List (CHPL)                       
13   -   database  -  
                                                                   
Practitioners must not be hospital-based 
10   -   MMIS   3  
Hospitals must have at least 10% Medicaid patient volume 
                                        M   e  d  icare hospital                      
(acute care hospital only) 
9   3   cost reports; MMIS   1  
Hospitals must have an average length of stay of 25 days 
8  Medicare hospital                      
or less (acute care hospital only) 
   cost reports; MMIS   5  
Source:  OIG analysis of State oversight plans and State interviews, 2011. 
 
All 13 States plan to use the CHPL database to verify that practitioners and hospitals have 
certified EHR technology.29  For this verification, 10 States have created electronic interfaces 
with the CHPL database to verify that practitioners and hospitals have submitted valid certified 
EHR technology codes.  Three States plan to manually compare practitioners and hospitals 
                                                           
29 The CHPL database contains a list of EHR products that have been certified according to regulations promulgated by the 
Office of the National Coordinator for HIT.   
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self-reported EHR technology codes against the CHPL database.  These States reported that they 
may automate this process at a later date. 
Finally, most States also plan to use Medicare hospital cost reports to verify two hospital 
eligibility requirements.30  Nine States will use Medicare hospital cost reports to help them 
completely verify hospitals reported Medicaid patient volume percentages.  Eight States 
reported that they plan to use Medicare hospital cost reports to verify prior to payment that 
hospitals have an average length of stay of 25 days or less. 
 
CONCLUSION 
 
All 13 States in our study reported that they plan to verify at least half of eligibility requirements 
prior to making EHR incentive payments.  Where data are available to do so, States plan to 
compare self-reported eligibility information to other data sources.  Verifying self-reported 
eligibility information prior to making payments helps States ensure the integrity of their EHR 
incentive payments.  In addition, all States reported that they are in the process of developing 
plans to audit eligibility requirements after payment. 
However, we found that data availability limits both the number of requirements that States can 
verify prior to payment and the completeness of those verifications.  For certain eligibility 
requirements, States do not currently collect the data they need to conduct complete 
verifications.  Further, not many States reported plans to start collecting all the necessary data 
because the effort would be resource intensive and logistically impractical for most States.  
Almost all States plan to conduct partial verifications of practitioners Medicaid patient volume 
using existing Medicaid claims data.  They do not plan to conduct complete verifications because 
they do not have total patient volume, which they need to completely verify practitioners 
Medicaid patient volume.  Finally, States plan to completely verify eligibility requirements for 
which they report that data are available to do so. 
The data limitations identified in this report affect States ability to proactively ensure the 
integrity of their EHR incentive payments.  Therefore, States should take these limitations into 
account when planning their program oversight.  For example, States could strengthen oversight 
of their EHR incentive programs by focusing postpayment audits on eligibility requirements that 
cannot be completely verified prior to payment.  Additionally, States that have not yet started 
their EHR incentive programs should note the potential inaccuracies in using MMIS claims data 
to verify Medicaid patient volume that we highlight in this report, and plan accordingly when 
designing prepayment verifications. 
                                                           
30 Medicare hospital cost reports include hospital utilization data, cost, and charges associated with patient care.  See Cost 
Reports: General Information.  Accessed at www.cms.gov on May 19, 2011. 
OEI-05-10-00080  Early Review of States Planned Medicaid EHR Incentive Program Oversight   
Page 13  Donald M. Berwick, M.D. 
 
 
This report is being issued directly in final form because it contains no recommendations.  If you 
have comments or questions about this report, please provide them within 60 days.  Please refer 
to report number 05-10-00080 in all correspondence. 
   
OEI-05-10-00080  Early Review of States Planned Medicaid EHR Incentive Program Oversight   
Page 14  Donald M. Berwick, M.D. 
 
 
APPENDIX A 
 
Figure A-1:  Needy Individual Patient Volume Percentage Calculation for Practitioners Practicing Predominantly in a 
 Federally Qualified Health Center or Rural Health Center 
 
States may not have these data 
Uncompensated/
Medicaid  CHIP*  Numerator:  Needy 
Sliding Scale 
Individual Patient Volume 
% = 
Private/ Uncompensated/
Medicaid  CHIP*  Medicare  Denominator:  Total 
Self-Pay  Sliding Scale 
Patient Volume 
States may not have these data 
* Childrens Health Insurance Program.  
Figure A-2:  Medicaid Patient Volume Percentage Calculation for Practitioners and Hospitals 
Medicaid  Numerator:  Medicaid 
Patient Volume 
% = 
Private/ Uncompensated/
Medicaid  CHIP  Medicare  Denominator:  Total 
Self-Pay  Sliding Scale 
Patient Volume 
States may not have these data 
OEI-05-10-00080  Early Review of States Planned Medicaid EHR Incentive Program Oversight