The conversion to electronic medical records — a critical piece of the Obama administration's plan for health care reform — is "vulnerable" to fraud and abuse because of the failure of Medicare officials to develop appropriate safeguards, according to a sharply critical report to be issued Thursday by federal investigators.
Mike Spencer/Wilmington Star-News, via Associated Press
Celeste Stephens, a nurse, leads a session on electronic records at New Hanover Regional Medical Center in Wilmington, N.C.
Centers for Medicare and Medicaid Services
Marilyn Tavenner, acting administrator for Medicare.
The use of electronic medical records has been central to the aim of overhauling health care in America. Advocates contend that electronic records systems will improve patient care and lower costs through better coordination of medical services, and the Obama administration is spending billions of dollars to encourage doctors and hospitals to switch to electronic records to track patient care.
But the report says Medicare, which is charged with managing the incentive program that encourages the adoption of electronic records, has failed to put in place adequate safeguards to ensure that information being provided by hospitals and doctors about their electronic records systems is accurate. To qualify for the incentive payments, doctors and hospitals must demonstrate that the systems lead to better patient care, meeting a so-called meaningful use standard by, for example, checking for harmful drug interactions.
Medicare "faces obstacles" in overseeing the electronic records incentive program "that leave the program vulnerable to paying incentives to professionals and hospitals that do not fully meet the meaningful use requirements," the investigators concluded. The report was prepared by the Office of Inspector General for the Department of Health and Human Services, which oversees Medicare.
The investigators contrasted the looser management of the incentive program with the agency's pledge to more closely monitor Medicare payments of medical claims. Medicare officials have indicated that the agency intends to move away from a "pay and chase" model, in which it tried to get back any money it has paid in error, to one in which it focuses on trying to avoid making unjustified payments in the first place.
Late Wednesday, a Medicare spokesman said in a statement: "Protecting taxpayer dollars is our top priority and we have implemented aggressive procedures to hold providers accountable. Making a false claim is a serious offense with serious consequences and we believe the overwhelming majority of doctors and hospitals take seriously their responsibility to honestly report their performance."
The government's investment in electronic records was authorized under the broader stimulus package passed in 2009. Medicare expects to spend nearly $7 billion over five years as a way of inducing doctors and hospitals to adopt and use electronic records. So far, the report said, the agency has paid 74, 317 health professionals and 1,333 hospitals. By attesting that they meet the criteria established under the program, a doctor can receive as much as $44,000 for adopting electronic records, while a hospital could be paid as much as $2 million in the first year of its adoption. The inspector general's report follows earlier concerns among regulators and others over whether doctors and hospitals are using electronic records inappropriately to charge more for services, as reported by The New York Times last September, and is likely to fuel the debate over the government's efforts to promote electronic records. Critics say the push for electronic records may be resulting in higher Medicare spending with little in the way of improvement in patients' health. Thursday's report did not address patient care.
Even those within the industry say the speed with which systems are being developed and adopted by hospitals and doctors has led to a lack of clarity over how the records should be used and concerns about their overall accuracy.
"We've gone from the horse and buggy to the Model T, and we don't know the rules of the road. Now we've had a big car pileup," said Lynne Thomas Gordon, the chief executive of the American Health Information Management Association, a trade group in Chicago. The association, which contends more study is needed to determine whether hospitals and doctors actually are abusing electronic records to increase their payments, says it supports more clarity.
Although there is little disagreement over the potential benefits of electronic records in reducing duplicative tests and avoiding medical errors, critics increasingly argue that the federal government has not devoted enough time or resources to making certain the money it is investing is being well spent.
House Republicans echoed these concerns in early October in a letter to Kathleen Sebelius, secretary of health and human services. Citing the Times article, they called for suspending the incentive program until concerns about standardization had been resolved. "The top House policy makers on health care are concerned that H.H.S. is squandering taxpayer dollars by asking little of providers in return for incentive payments," said a statement issued at the same time by the Republicans, who are likely to seize on the latest inspector general report as further evidence of lax oversight. Republicans have said they will continue to monitor the program.
In her letter in response, which has not been made public, Ms. Sebelius dismissed the idea of suspending the incentive program, arguing that it "would be profoundly unfair to the hospitals and eligible professionals that have invested billions of dollars and devoted countless hours of work to purchase and install systems and educate staff." She said Medicare was trying to determine whether electronic records had been used in any fraudulent billing but she insisted that the current efforts to certify the systems and address the concerns raised by the Republicans and others were adequate.
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