No, as you suspect, any HSA distributions that were used for qualified medical expenses do NOT count as income.
If you are seeing this number on the Personal Income menu screen, this number is the total of your distributions, not (necessarily) the amount added to income.
Look at your 1040 preview (Tax Tools->Tools->View Tax Summary and click on "Preview My 1040") and see what is showing on line 21 for Other Income. If you finished the HSA interview after entering all your HSA data and answering all the questions, then you will not see this number on Line 21.
