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Habersham Medical Center must pay back $1.5M to federal incentive program

POSTED: October 10, 2013 12:12 a.m.

Demorest-based Habersham Medical Center is moving into the digital age but at much more trouble and expense than it had hoped.

The hospital, now forging ties with Gainesville’s Northeast Georgia Medical Center, has been involved in the federal Centers for Medicare and Medicaid Services’ Electronic Health Records Incentive Programs, which helps health providers pay for developing medical record technology.

“We acquired the computers to do that and, with those computers, you have to have software modules,” said David Kerby, hospital authority chairman. “We thought we had acquired all that and stated to (the agency) that we had met the standard for their approval.”

In response, the agency, also known as CMS, gave the hospital $1.5 million to defray expenses. At that point, the hospital had spent about $3 million on upgrades, Kerby said.

After Jerry Wise started April 1 as interim CEO, “he wanted to know where we stood on getting the second payment,” Kerby said.

Wise, who is now CEO, “never got a satisfactory answer from our (information technology) director ... and he let the IT director go,” Kerby said.

“Then, he hired some consultants to look at our system, and they determined that ... a statement we made (to CMS) that it would work was in error,” he said.

There are two stages in the program, each having two payments.

“There are four payment points,” Wise said. “We had to return the first, which also made us ineligible for the second. However, we will be eligible for the third and fourth payments.”

The authority voted last month to pay back the $1.5 million, about the same time it had signed a letter of intent with NGMC as an official step in outlining a proposed partnership.

“We have just completed making the payment to the CMS for the (Medicare) part (of the grant),” Kerby said. “We still haven’t gotten from the state the Medicaid part. They have not notified us yet how to make that payment.”

In the meantime, the hospital hasn’t paused in its digital efforts.

“We’ve already budgeted and purchased the remaining software and hardware items to complete the system,” Kerby said.

An HMC news release issued in September says the hospital “hopes to qualify for the remaining $1.3 million in federal incentives and to continue receiving the full reimbursement from Medicare.”

The hospital has stayed in touch with NGMC officials on the matter, Kerby said.

“We felt like it was the only responsible thing to do,” he said. “We’re in negotiations in good faith. When this problem came up, we informed Northeast Georgia (about it) and what we were going to have to do about it. They’re fully aware of the issue and how we handled it.”

Melissa Tymchuk, NGMC spokeswoman, acknowledged as much, adding that HMC is “handling the situation independently” from NGMC.

“We are certainly hopeful that HMC can achieve the steps necessary to receive ... future funding, as this is great assistance to hospitals working to meet these technology requirements,” she said.

The letter of intent allows the two hospitals to legally share financial and employment models and service lines. They began discussing possibly sharing resources and services after a Habersham official contacted NGMC earlier this year to express interest.


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