The Audit and Review Process
The Texas Health and Human Services Commission (HHSC) contracts with an independent audit firm to conduct audits of Texas Medicaid Electronic Health Record (EHR) Incentive/Promoting Interoperability (PI) Program payments. The auditors notify each Eligible Professional (EP) and Eligible Hospital (EH), referred to as “provider”, selected for an audit. If audited, the provider must complete a questionnaire and supply auditable supporting documentation to verify that the provider met the federal and state eligibility requirements to receive Texas Medicaid EHR Incentive/PI Program payments.
Audit Results Notification Letter and Remediation
After completing the audit, the auditors inform the provider of the outcome and explain any deficiencies in an audit results notification letter. The provider has 10 days to submit additional documentation to the auditors to demonstrate remediation or otherwise resolve deficiencies cited in the notification letter. This remediation period is the last opportunity for the provider to add new documentary evidence to their case file during the remainder of the audit and review process.
Draft Audit Report and Provider Management Response
If the provider's deficiencies are not resolved during the remediation period, the auditors issue a draft audit report. The provider may respond to the draft audit report. To submit a response to HHSC, the provider must complete the appropriate audit report response form (refer to the Audit Response Forms section, below) and submit a written management response within 30 calendar days of the delivery receipt date of the draft audit report. Other than the information provided in the response form and the management response, no new supporting documentation or evidence may be submitted or will be considered by any party reviewing the issue.
HHSC will acknowledge receipt of the above documents and reviews the provider's management response. A management response gives the provider an opportunity to summarize and communicate their position on the draft audit report and allows for any disputed claims to be incorporated into the final audit report. HHSC does not make a determination related to the audit findings at this level of review.
Final Audit Report and Ad Hoc Informal Panel Review
HHSC provides the auditors with the management response, which is then incorporated into the appendix of the final audit report. The provider may request to have their case reviewed by an ad hoc review panel. The provider has 30 days from the delivery of the final audit report to request an informal review by an HHSC appointed Ad Hoc Review Panel. To request a review of the final audit report, the provider must submit the appropriate audit report response (refer to the Audit Response Forms section, below) to HHSC by the applicable deadline. As the case approaches panel review, HHSC notifies the provider of the final instructions and deadlines for the provider’s review submission requirements.
Case review assignments and the actual review time by the panel are dependent on panel caseload and scheduling factors. More detailed information on the Ad Hoc Informal Panel Review process, including format and submission requirements, is available online.
After reviewing the case, the panel issues a written non-binding recommendation to HHSC, and HHSC considers the recommendation before issuing a final determination. If HHSC determines there were no audit deficiencies, no further action is taken. However, if HHSC agrees with any final audit report finding or deficiency, the commission notifies the provider via letter. If applicable, the provider is responsible for refunding the overpayment of incentive funds to HHSC, which may include recoupment through Medicaid claims from the recipient payee or other collection methods.
Audit Response Forms
The audit response forms and instructions are available online:
- Eligible Professional Audit Report Response (HHS Form 2702)
- Eligible Hospital Audit Report Response (HHS Form 2703)
The completed audit response form must be received by the applicable deadline by email at EHR_audit_appeals@hhsc.state.tx.us.
Please note: If an HHSC receipt confirmation email is not received by the provider or their authorized representative within three business days following the submission of an audit report response form or provider memorandum, it is the responsibility of the provider or their authorized representative to contact HHSC.
States are required under 42 Code of Federal Regulations §495.316 to conduct audits of payments to eligible professionals and eligible hospitals, referred to as providers, participating in the Texas Medicaid EHR Incentive/PI Program.
HHSC follows policies and procedures related to audit notifications and review of audit findings in accordance with Texas Administrative Code (TAC) Title 1, Part 15, Chapter 356, Subchapter B, §356.202, “Audit Review and Recoupment,” and TAC Title 1, Part 15, Chapter 354, Subchapter B, §354.1450, “Audits of Medicaid Providers.”