HHS Secretary Kathleen Sebelius (AP Photo/Carolyn Kaster)

WASHINGTON (AP) — Computerized medical records were supposed to cut costs. Now the Obama administration is warning hospitals that might be tempted to use the technology for gaming the system.

Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder issued the warning Monday in a letter to hospital trade associations, following media reports of alleged irregularities.

The New York Times has posted a document that appears to be a copy of the letter on its website.

The officials said there were indications that some providers have been using computerized records technology to possibly obtain payments to which they were not entitled. The officials raised the threat of prosecution.

Among the practices under scrutiny is what’s called “upcoding” — or raising the severity of a patient’s condition to get more money.

Sebelius and Holder said the Centers for Medicare & Medicaid Services (CMS) has the authority to “address inappropriate increases in coding intensity in its payment rules.”

“CMS will consider future payment reductions as warranted,” officials said.

Hospitals say part of the problem is that Medicare has lagged in updating billing guidelines for emergency room and clinic visits.

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