Health Management Associates (HMA), the Naples, Fla.-based operator of acute care hospitals primarily in non-urban America, will restate financial statements from 2010 through 2013 after an internal review discovered that 11 of its 71 hospitals inappropriately collected $31 million in benefits from the federal government's electronic health record (EHR) incentive program.
The payments were recognized by the hospitals as income between July 1, 2011 and June 30, 2013. In October 2013, the company determined that it had made an error in applying the requirements for certifying its EHR technology under these programs. The 11 hospitals it had enrolled in the healthcare information technology (HCIT) programs did not meet the meaningful use criteria necessary to qualify for HCIT payments. HMA intends to file the necessary amendments to its prior filings as soon as possible, its officials say.
Of the $31 million in payments HMA recognized as income, approximately $8.3 million was in 2011, approximately $17.3 million in 2012, and approximately $5.4 million in the first six months of 2013. As a result, HMA withdrew the 11 hospitals from the HCIT programs and has repaid the majority of the funds to the Centers for Medicare and Medicaid Services (CMS).
HMA, which currently operates 71 hospitals in 15 states with approximately 11,000 licensed beds, is in the process of repaying the balance of the funds to the relevant state programs. It says it expects to re-enroll the hospitals in the HCIT programs and may be able to recoup some portion of the amounts repaid.
HMA says that, due solely to this matter, its financial statements and related communications for fiscal years 2010, 2011 and 2012 and the fiscal quarters ended March 31, 2013 and June 30, 2013, and its annual 2013 guidance issued on July 30, 2013, should no longer be relied upon.
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