Independent audit finds deficiencies in hospital Medicaid cost reporting
LBJ Medical Center’s audit report for fiscal year 2011 — Oct. 1, 2010 to Sept. 30, 2011— found problems with “Medicare Cost Reporting” and corrective action has been taken by the medical center, according to the independent auditor Wipfli, LLP, of Spokane, Wash.
According to the auditor, the annually filed Medicare cost report “is not being filed accurately and, in some cases, not being filed in accordance” with instructions by the Center for Medicaid and Medicare (CMS), the federal entity that oversees the Medicaid and Medicare programs.
The audit report states that a review of the annually filed Medicare cost report identified the following deficiencies:
• Revenue is not being recorded accurately by department
• Staff expenses are not being accurately recorded in patient care departments
• Likely inaccurate hospital square footage statistics
• Patient meals are not being tracked accurately
• The psychiatric unit should be reported as an ancillary department or clinic rather than an inpatient unit.
• The emergency room statistics should be separately reported from the clinics
• Purchasing should be reported as part of administration and general costs
• Nursing supplies should be allocated only to nursing departments
According to the auditors, some of these problems are “caused by inadequacies in the hospital accounting records” and some “have been caused by poor diligence by prior cost report preparers.”
The impact of these deficiencies, the auditors say, is the potential reduction or inappropriate claim of Medicare reimbursement; and a potential lack of an accurate cost assessment of Medicaid patients.
“An inaccurate assessment of the cost of servicing Medicaid patients could result in the hospital not requesting enough Medicaid funding each year in its block grant,” the audit report says and recommends the hospital correct these deficiencies.
As part of the corrective action plan, said the auditor’s report, “CMS made a grant available to the hospital that included an updated charge master and three on-site visits by our Cost Report preparation firm to provide training and education to all hospital departments and additional specific accounting education for the finance team. This training will provide a much needed foundation.”
During these on-site visits the firm is working with specific departments to address all of the conditions noted above, the report says.
“The goal is to have all of the required cost report requirements in place and functional by the end of FY2012 so that the FY2013 cost report will be complete.”
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