Between July 2011 and June 2013, Health Management said it received $31 million in Medicare and Medicaid electronic health record incentive payments. The 11 unnamed hospitals and associated physician practices had implemented EHRs and claimed to achieve meaningful use. However, the for-profit hospital chain determined it made errors in determining proper MU due to accounting errors.
Health Management will restate financial statements for 2010, 2011, 2012 and the first two quarters of 2013. In a filing with the Securities and Exchange Commission, Health Management officials also said the financial reports and guidance for fiscal year 2013, which were prepared by Ernst & Young, “should no longer be relied upon.”
Health Management said it has repaid most of the EHR funds back to CMS and state programs, and it expects to re-enroll the 11 hospitals in Medicare and Medicaid EHR incentive programs. Company officials do not believe the misstatement will hinder its transaction with Franklin, Tenn.-based Community Health Systems. This summer, CHS agreed to acquire Health Management for $7.6 billion, and CHS executives expect the deal to close in the first quarter of 2014.
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