CFO Pleads Guilty To Meaningful Use Fraud

It had to happen eventually — the money is just too good.  The former chief financial officer of a now-closed Texas hospital has plead guilty to charges that he defrauded the meaningful use program, in what may be the first prosecution of its kind.

According to Healthcare IT News the former CFO of Shelby Regional Medical Center in Center, TX, has been indicted on charges that he falsely attested that Shelby Regional met meaningful use requirements for fiscal year 2012. The alleged fraud garnered the medical center $783,655 in payments, according to the indictment.

It’s not that hospitals haven’t wrongly claimed large amounts of meaningful use cash before. In fact, Florida-based Health Management Associates seems to have wrongfully claimed $31 million in meaningful use payments last year prior to its acquisition by Community Health Systems, with 11 of 71 HMA hospitals failing to meet meaningful use criteria.

But it does seem to be unusual, if not unprecedented, for CMS to catch providers in the act of willfully falsifying meaningful use attestations. Either the self-attestation honor system is working or CMS  is failing to catch a great deal of monkey business.

In Shelby Regional’s case, the hospital relied on paper records throughout fiscal year 2012 and only minimally used an EMR, according to the feds. To make sure the facility still captured its meaningful use payout, CFO Joe White instructed the software vendor and employees of the hospital to input data from paper records into the EMR, sometimes months after patients were discharged and after the fiscal year. (If convicted, White faces five years in prison).

What makes the purported fraud at Shelby Regional seem all the more egregious is that it was apparently part of a much larger scheme. Tariq Mahmood, MD, who owned Shelby Regional and five other Texas hospitals, is also being investigated by federal prosecutors for alleged healthcare fraud. The six hospitals owned by Mahmood collected a total of $16.8 million in meaningful use incentives for fiscal 2011 and 2012.

The truth is, there’s probably a lot more fraud going on in the meaningful use program that hasn’t been caught. After all, a report by the Office of the Inspector General for HHS issued early this year concluded that CMS fraud auditors such as the Recovery Audit Contractors weren’t doing a great job of reviewing EMR records, failing to take basic steps such as reviewing EMR audit logs to verify that medical records support a claim. It’s little wonder they haven’t caught more providers deliberately gaming the meaningful use system.

Hospitals can do more to avoid accidental problems with meaningful use claims, too. Observers have noted that few hospitals have sufficient safeguards in place to catch attestation problems before they happen.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.