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 

OEI-05-10-00080 Early Review of States' Planned Medicaid EHR Incentive Program Oversight 
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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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

 

1 ARRA §§ 4101 and 4201, amending Titles XVIII and XIX of the Social Security Act.

 For example, a State would receive 

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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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

CMS has identified EHR incentive program eligibility requirements as an oversight priority for 

States’ EHR incentive programs in 2011.

 According to CMS, States are encouraged to 

revise their plans as they make changes to their EHR incentive programs.

12

EHR Incentive Program Eligibility Requirements

 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. 

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 children’s 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.
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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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 children’s 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 Children’s 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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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 CMS’s 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.
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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

information prior to payment. We defined a verification prior to payment as a State’s

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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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

State

Number of Eligibility 

Requirements That State 

Plans To Verify

Percentage of Total 

Eligibility Requirements

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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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 

Eligibility Requirement

Number of 

States That 

Plan Complete 

Verification

Number of 

States That 

Plan Partial 

Verification

Examples of Data 

Sources Used for 

Complete or Partial 

Verification

Number of 

States That 

Plan No 

Verification

Practitioners must have at least a 30% needy 

individual patient volume if they are practicing 

predominantly in an FQHC or RHC 

1 

 

2 

Contact FQHC or RHC, 

FQHC reports, 

documentation submitted 

by practitioner

 

10 

If practitioner is a PA, he or she must practice 

in a PA-led FQHC or RHC 

4 

 

-

FQHC reports; contact 

PA, FQHC, or RHC 

 

9 

Practitioners and hospitals must adopt, 

implement, or upgrade an EHR 

5 

 

-

Documentation 

submitted by practitioner

or hospital (e.g., receipts, 

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

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 

 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.

 28 MMIS are States’ Medicaid claims processing systems.
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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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 

Eligibility Requirement

Number of 

States That 

Plan Complete 

Verification

Number of 

States That 

Plan Partial 

Verification

Example of Data 

Source Used for 

Complete or Partial 

Verification

Number of 

States That 

Plan No 

Verification

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 

1 

 

11 

Documentation 

submitted by 

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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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 

practitioner’s 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/GYN’s 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/GYN’s 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 practitioner’s 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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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 

Eligibility Requirement

Number of 

States That Plan 

Complete 

Verification

Number of 

States That 

Plan Partial 

Verification

Examples of Data 

Sources Used for 

Complete or Partial 

Verification

Number of 

States That 

Plan No 

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

 

-

Practitioners and hospitals must have certified EHR 

technology 

13 

 

- 

Certified Health 

Information 

Technology (HIT) 

Product List (CHPL)

database

 

- 

Practitioners must not be hospital-based 

10 

 

- MMIS 

 

3 

Hospitals must have at least 10% Medicaid patient volume 

(acute care hospital only) 

9 

 

3 

Medicare hospital 

cost reports; MMIS 

 

1 

Hospitals must have an average length of stay of 25 days 

or less (acute care hospital only) 8 

 

Medicare hospital 

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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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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.
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OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

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.
Page 14 – Donald M. Berwick, M.D.

OEI-05-10-00080 Early Review of States’ Planned Medicaid EHR Incentive Program Oversight

APPENDIX A

* Children’s Health Insurance Program. 

Denominator: Total 

Patient Volume

Numerator: Needy

Individual Patient Volume

Medicaid CHIP* Uncompensated/

Sliding Scale

Private/

Self-Pay 

Figure A-1: Needy Individual Patient Volume Percentage Calculation for Practitioners Practicing Predominantly in a 

Federally Qualified Health Center or Rural Health Center

Medicare

Medicaid

% =

CHIP* Uncompensated/

Sliding Scale

States may not have these data

States may not have these data

Denominator: Total

Patient Volume

Numerator: Medicaid

Patient Volume

Medicaid CHIP Uncompensated/

Sliding Scale

Private/

Self-Pay 

Figure A-2: Medicaid Patient Volume Percentage Calculation for Practitioners and Hospitals

Medicare

Medicaid

% =

States may not have these data