Audit report, schedule of reimbursable costs and agency visit statistics, Georgia Home Health Care Agency, Inc., Reidsville, Georgia, Medical provider number 00186062A, for the year ended April 30, 1994, Georgia Department of Medical Assistance. [Apr. 30, 1994]

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334

AUDIT REPORT SCHEDULE OF REIMBURSABLE COSTS
AND AGENCY VISIT STATISTICS GEORGIA HOME HEALTH CARE AGENCY, INC.
REIDSVILE, GEORGIA MEDICAID PROVIDER NO. 00186062A FOR THE YEAR ENDED APRIL 30, 1994 GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE
Report Prepared By: State a/Georgia
Department ofAudits andAccounts Medicaid and Local Govemment Audits Division
254 Was/1i11gto11 Street, S. W, Suite 322 A1/anla, Georgia 30334-8400 /404) 656-2006 Alic/we/ A. Plam, Director

GEORGIA HOME HEALTH CARE AGENCY, INC, - TABLE OF CONTENTS -

~

AUDITOR'S REPORT

V

SCOPE OF THE AUDIT

SCHEDULE OF REIMBURSABLE COSTS

2

NOTES TO SCHEDULE

SUMMARY OF FIELD AUDIT ADJUSTMENTS

EXPLANATION OF FIELD AUDIT ADJUSTMENTS

APPENDIX

MANAGEMENT COMMENT LETTER

13

CLAUDE L VICKERS
STATE AUDITOR.

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
Telephone (404) 656-2006 Facslmlle (404) 656-7535
June 28, 1995

Home Health Services Program Division ofNon-Institutional Reimbursement Georgia Department ofMedical Assistance 2 Peachtree Street, NW 25th Floor Atlanta, Georgia 30303-3159
Ladies and Gentlemen:
We have audited parts I and II of the Medicaid Cost Data Form filed with the Georgia Department ofMedical Assistance under the Title XIX Medicaid Program by Georgia Home Health Care Agency, Inc., for the year ended April 30, 1994, and have compiled the accompanying Schedule ofReimbursable Costs and Agency Visit Statistics based on our audit. The Medicaid Cost Data Form is the responsibility of the management of Georgia Home Health Care Agency, Inc. Our responsibility is to determine if the reimbursable costs and agency visit statistics reported on the Medicaid Cost Data Form are reasonable and allowable, in all material respects, in accordance with the federal and state laws, regulations, policies and procedures governing the Georgia Home Health Services Program. It is also our responsibility to report the results of our audit, including any required adjustments to parts I and II ofthe Medicaid Cost Data Form, to the Georgia Department of Medical Assistance.
We conducted our audit in accordance with the Home Health Agency Audit Program approved by the Georgia Department of Medical Assistance. Our audit included examining and evaluating, on a test basis, evidence supporting the amounts and disclosures in Parts I and II of the Medicaid Cost Data Form. Our audit also included assessing the accounting principles used and significant estimates made by management. We believe our audit provides a reasonable basis for our report.
V

As descnbed in Note I ofthe Notes to Schedule, the accompanying Schedule ofReimbursable Costs and Agency Visit Statistics was prepared to present the data necessary for the Georgia Department ofMedical Assistance to determine Medicaid reimbursement and is not intended to be a presentation in accordance with generally accepted accounting principles, nor is it intended to be a complete presentation ofthe assets, liabilities, revenues and expenses ofGeorgia Home Health Care Agency, Inc., on the basis described.
In our opinion, the "adjusted totals" column in the accompanying Schedule ofReimbursable Costs and Agency Visit Statistics - which was compiled by us and reflects any adjustments to parts I and II of the Medicaid Cost Data Form required as a result of our audit - presents fairly, in all material respects, the reimbursable costs and agency visit statistics of Georgia Home Health Care Agency, Inc., for the year ended April 30, 1994, on the basis of accounting described in Note I.
This report is intended to be used solely in connection with the administration of the Georgia Department of Medical Assistance Home Health Services Program and is not to be used or relied upon for any other purpose.
?:~A

CLV/lb/by

Claude L. Vickers State Auditor

vii

GEORGIA HOME HEALTH CARE AGENCY, INC. SCOPE OF THE AUDIT
FOR THE YEAR ENDED APRIL 30, 1994
This audit was performed in order to determine if the reimbursable costs and agency visit statistics reported in parts I and II of the Medicaid Cost Data Form are reasonable and allowable, in all material respects, in accordance with the federal and state laws, regulations, policies and procedures governing the Georgia Medicaid Program, and to report to the Georgia Department of Medical Assistance (DMA) any adjustments to parts I and II of the Medicaid Cost Data Form required as a result of our audit.
In order to accomplish these objectives, we examined, on a test basis, evidence supporting the amounts and disclosures in parts I and II of the Medicaid Cost Data Form, and assessed the accounting principles used and significant estimates made by management. Tested transactions and accounts were evaluated for compliance with DMA Policies and Procedures for Home Health Services and for compliance with federal laws and regulations applicable to the Title XIX Medicaid Program. Any adjustments to parts I and II of the Medicaid Cost Data Form required as a result of our audit are included in this report.
Costs reported in part II of the Medicaid Cost Data Form include both the direct costs of providing the reimbursable services and the indirect costs allocated to them. These indirect costs result from the step-down of the general service costs on Worksheet B ofthe Medicare cost report (HCFA-1728). The costs associated with these general service cost centers were included in our audit and adjustments to these cost centers, if any, are shown in the accompanying Summary of Field Audit Adjustments.
Our audit included a limited consideration of the organization's internal control structure sufficient to plan the audit. Our consideration for this limited purpose would not necessarily disclose all reportable conditions in the internal control structure. Accordingly, we do not express an opinion on the internal control structure. However, as a result of our audit, reportable conditions were identified in controls applicable to financial operations and in controls related to compliance with Medicaid policies, procedures, laws and/or regulations. These weaknesses are described in the management letter included in the Appendix of this report.

GEORGIA HOME HEALTH CARE AGENCY, INC. SCHEDULE OF REIMBURSABLE COSTS AND AGENCY VISIT STATISTICS FOR THE YEAR ENDED APRIL 30, 1994

REIMBURSABLE COSTS

PER COST DATAFORM
AS FILED

Skilled Nursing Care Physical Therapy Occupational Therapy Home Health Aide

$

1,236,308

18,480

6,053

540 544

Total Reimbursable Costs $

J 801 385

FIELD AUDIT ADJUSTMENTS

$

(75,550)

(990)

(323)

(33 140)

$

(j IQ 00})

ADJUSTED TOTALS
$ 1,160,758 17,490 5,730
507 404
$ J 62) 382

l\1EDICAID VISITS

Skilled Nursing Care

403

404

Physical Therapy

5

5

Home Health Aide

469

470

Total Medicaid Visits

877

872

TOTAL AGENCY VISITS
Skilled Nursing Care Physical Therapy Occupational Therapy Home Health Aide
Total Agency Visits

14,039 190 27
22 801
37 057

(14)

14,025

(23)

167

(1)

26

(29}

22 772

(67)

36220

2

GEORGIA HOME HEALTH CARE AGENCY, INC. NOTES TO SCHEDULE
FOR THE YEAR ENDED APRIL 30, 1994
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ENTITY INFORMATION
Georgia Home Health Care Agency, Inc., provides home health services to. residents of Appling, Candler, Emanuel, Evans, JeffDavis, Liberty, Long, Montgomery, Tattnall, Toombs, and Wayne counties. The residents of this eleven county area are served through the provider's offices in Reidsville, Georgia. The agency was operated as a freestanding home health agency for the year ended April 30, 1994.
BASIS OF ACCOUNTING The Medicaid Cost Data Form and the associated Schedule of Reimbursable Costs and
Agency Visit Statistics, hereinafter referred to as the Schedule, were prepared in conformity with the Principles of Reimbursement for Provider Cost published by the Secretary of Health and Human Services as modified by the provisions of Policies and Procedures for Home Health Services published by the Georgia Department of Medical Assistance. This basis of accounting required by the Medicaid Program differs from generally accepted accounting principles. Consequently, the information presented in this report reflects only the allowable reimbursable costs and agency visit statistics required for DMA to determine the provider's Medicaid reimbursement rate. This report does not reflect the provider's financial position or the results of its operations; it is intended to be used solely in connection with the administration ofthe Georgia Department of Medical Assistance Medicaid Program and is not to be used or relied upon for any other purpose.
NOTE 2: FIELD AUDIT ADJUSTMENTS The Field Audit Adjustments column on the Schedule is provided to show the net effect of
adjustments made during the field audit process. The audit adjustments made as a result of this audit are shown on the Summary ofField Audit Adjustments and are explained in the Explanation of Field Audit Adjustments.
NOTE 3: MEDICAID AGGREGATE COST PER VISIT The Schedule ofReimbursable Costs and Agency Visit Statistics shows the allowable costs
and visit statistics claimed on the cost data form, any field audit adjustments made, and the resulting totals after adjustment. In the summary on the following page, these data have been used to calculate the Medicaid aggregate cost per visit in the same manner used by DMA to calculate the per visit reimbursement rate. The aggregate cost per visit shown does not include any inflation factor, incentives, or supply add-on; nor does it necessarily reflect the amounts which will be used by DMA for rate-setting purposes.
3

GEORGIA HOME HEALTH CARE AGENCY, INC.
NOTES TO SCHEDULE FOR THE YEAR ENDED APRIL 30, 1994

TOTAL AGENCY
COST

TOTAL AGENCY
VISITS

AGENCY COST
PER VISIT

MEDICAID VISITS

MEDICAID COST

MEDICAID VISITS

AGGREGATE COST
PER VISIT

Skilled Nursing Care Physical Therapy Occupational Therapy Home Health Aide

$ 1,160,758 17,490 5,730
507 404

.i:,.

Total

$ 1,691,382

14,025 $ 167 26
22 772
36,990

82.76 104.73 220.38 22.28

404 $ 5 0
470

33,435 524 0
10472

879 $ ~ 4 3 1

879 $

50.55

GEORGIA HOME HEALTH CARE AGENCY, INC. SUMMARY OF FIELD AUDIT ADJUSTMENTS FOR THE YEAR ENDED APRIL 30, 1994

ADJUSTMENT NUMBER

REIMBURSABLE COSTS

SKILLED NURSING CARE

1

Step Down ofGeneral Service Costs

$ (71,367)

2

Accrual Basis ofAccounting

(4,183)

PHYSICAL THERAPY

Step Down of General Service Costs

OCCUPATIONAL THERAPY

Step Down of General Service Costs

HOME HEALTH AIDE

1

Step Down ofGeneral Service Costs

$ (31,263)

2

Accrual Basis of Accounting

(1,877)

CAPITAL RELATED - MOVABLE EQUIPMENT

1

Step Down ofGeneral Service Costs

$ 16,404

3

Lack of Sufficient Documentation

(1,315)

4

Costs Not Related to Patient Care

(10,440)

5

Assets Leased From Related Party

(4,324)

6

Excess Depreciation

(466)

7

Prior Year Audit Adjustments

141

PLANT OPERATION AND MAINTENANCE

1

Step Down ofGeneral Service Costs

$ 8,372

3

Lack of Sufficient Documentation

(1,888)

5

Assets Leased From Related Party

(6 484)

$ (75,550) (990) (323)
(33,140)
0 0

5

GEORGIA HOME HEALTH CARE AGENCY SUMMARY OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED APRIL 30, 1994

ADJUSTMENT NUMBER

REIMBURSABLE COSTS (continued)

ADMINISTRATIVE AND GENERAL

1

Step Down of General Service Costs

$ 82,932

2

Ai::crual Basis of Accounting

(5,070)

3

Lack of Sufficient Documentation

(30,014)

4

Costs Not Related to Patient Care

(3,033)

8

Liabilities Not Liquidated

(37,615)

9

Unpaid Compensation

(7,200)

Net Adjustment to Reimbursable Costs

0
p JO 001)

:MEDICAID VISITS
10 Skilled Nursing Care 10 Home Health Aide
Total Adjustment to Medicaid Visit Statistics

TOTAL AGENCY VISITS

11 Skilled Nursing Care

(14)

11 Physical Therapy

(23)

11

Occupational Therapy

(1)

11 Home Health Aide

(29)

Total Adjustment to Total Agency Visit Statistics

(67)

6

GEORGIA HOME HEALTH CARE AGENCY, INC. EXPLANATION OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED APRIL 30, 1994

ADruSTMENT NUMBER

EXPLANATION

STEP DOWN OF GENERAL SERVICE COSTS

General service costs of this provider are stepped down to the other cost centers on Worksheet B of the Medicare cost report. Adjustments were made to the general service costs claimed. These adjustments must be stepped down to the other cost centers in the same way as were the claimed costs. This adjustment is made to step down the net adjustments to the general service cost centers to the other cost centers. (Instructions to Medicare Cost Report Form 1728)

COST CENTER Skilled Nursing Care Physical Therapy Occupational Therapy Home Health Aide Capital Related - Movable Equipment Lack of Sufficient Documentation Costs Not Related to Patient Care Assets Leased from Related Party Excess Depreciation Prior Year Audit Adjustments Plant Operation and Maintenance Lack of Sufficient Documentation Assets Leased from Related Party Administrative and General Accrual Basis of Accounting Lack of Sufficient Documentation Costs Not Related to Patient Care Liabilities Not Liquidated Unpaid Compensation

$
$ 1,315 10,440 4,324 466 (141)
$ 1,888 6484
$ 5,070 30,014 3,033 37,615 7 200

(71,367) (990) (323)
(31,263)
16,404 8,372
82 932

Net Adjustment to Reimbursable Costs (I)

$

3 :ZfiS

(1) A total of $(3,765) was stepped down to other cost centers which do not receive 1,1edicaid reimbursement and are, therefore, not included in this report.

7

ADJUSTMENT NUMBER

EXPLANATION (continued}

2

ACCRUAL BASIS OF ACCOUNTING

Documentation examined during the audit showed that amounts recorded for certain expenses did not reflect actual amounts incurred for the period under review. Federal regulations provide that expenditures ... are recorded in the period in which they are incurred, regardless of when they are paid. This adjustment is made to decrease reimbursable costs claimed for expenses not applicable to the year under review. (HCFA 15-2302.1)

Adjustments to Balance Sheet Accounts:

Reimbursable Costs

April 30, 1994 Balance Accounts Payable Accrued Wages

$

(887)

(10 243)

Net Adjustment to Reimbursable Costs

$ (jJ J3Q)

COST CENTER Skilled Nursing Care Home Health Aide Administrative and General

$

(4,183)

(1,877)

(5,070)

Net Adjustment to Reimbursable Costs

$ ()J 130}

3

LACK OF SUFFICIENT DOCUMENTATION

Some ofthe expenses shown on the cost report were not supported by adequate documentary evidence. Federal regulations provide that cost information as developed by the provider must be current, accurate, and in sufficient detail to support payments made for services rendered to beneficiaries. This adjustment is made to remove the undocumented expenses from reimbursable costs. (HCFA 15-2304)

8

ADIDSTMENT NUMBER

EXPLANATION (continued}

COST CENTER Capital Related - Movable Equipment Plant Operation and Maintenance Administrative and General
Total Adjustment to Reimbursable Costs

$

(1,315)

(1,888)

(30 014)

$ (J3 2J7}

4

COSTS NOT RELATED TO PATIENT CARE

Expenses claimed in the cost report included payments which were not considered to be for patient care operations. Federal regulations provide that costs which are not appropriate or necessary and proper in developing and maintaining the operation of patient care facilities and activities are not allowable in computing reimbursable costs. This adjustment is made to remove the non-patient care expenses from reimbursable costs. (HCFA 15-2102.3, 2136.2, 2138.2; DMA Policies and Procedures Section 1001.2(b), (f), (h))

Items Advertising . Association Dues (50%) Civic Organization Dues Late Charges Non-Sufficient Funds Charges Personal Purchases Personal Use of Automobile Related Entity's Expense

$

(13-3)

(1,067)

(200)

(681)

(130)

(1,471)

(6,824)

(2 967)

$ (J3 473)

COST CENTER Capital Related - Movable Equipment Administrative and General

$ (10,440) (3,033)

Total Adjustment to Reimbursable Costs

$ (]}473}

9

ADJUSTMENT NUMBER

EXPLANATION (continued)

5

ASSETS LEASED FROM RELATED PARTY

Documentation examined during the audit showed that land, buildings, and/or equipment used in health care operations were leased from a related party. Federal regulations provide that reimbursement to a provider leasing facilities or equipment from a related organization is limited to the costs of ownership of the leased assets. This adjustment is made to decrease reimbursable expenses to the cost to the related party. (HCFA 15-1011.5)

COST CENTER Capital Related - Movable Equipment Related Party Expense Lease Expense

$

(4,324)

Plant Operation and Maintenance Related Party Expense Depreciation

(6 484)

Total Adjustment to Reimbursable Costs

$ (JQ 8Q8}

6

EXCESS DEPRECIATION

Documentation examined during the audit in support of fixed assets and depreciation showed that either the property was not included in the proper class or depreciation was not calculated in accordance with AHA guidelines. Federal regulations provide for the use of minimum required asset lives. This adjustment is made to reduce reimbursable costs claimed by the amount of depreciation expense claimed in excess of total allowable. (HCFA 15-104.17)

COST CENTER Capital Related - Movable Equipment

$

(466)

10

ADJUSTMENT NUMBER

EXPLANATION (continued)

7

PRIOR YEAR AUDIT ADJUSTMENTS

Documentation examined during the audit showed that adjustments made to the prior year cost report that affected current year costs were not reflected in the cost report for the period under review. This adjustment is made to increase reimbursable costs for the effect ofthose prior year audit adjustments.

COST CENTER Capital Related - Movable Equipment Depreciation Expense - Asset Capitalized in Prior Year Audit

$

141

8

LIABILITIES NOT LIQUIDATED

Liabilities shown on the Medicare cost report for April 30, 1993, included amounts which had not been paid at April 30, 1994. Federal regulations provide that short term liabilities must be liquidated within one year after the end of the cost reporting period in which the liability was incurred and must be made by check or other negotiable instrument, cash or legal transfer of other assets. Furthermore, where the liability is not liquidated within the 1-year time limit or does not qualify under the exceptions specified in HCFA 15-2305.1, the cost incurred for the related goods and services is not allowable in the cost reporting period when the liability is incurred, but is allowable in the cost reporting period when the liquidation of the liability occurs. This adjustment is made to reduce reimbursable costs for the expense relating to the unliquidated liability. (HCFA 15-2305A)

COST CENTER Administrative and General

$ (37 615)

9

UNPAID COMPENSATION

Reimbursable costs claimed on the cost report included accrued compensation which was not paid within required time limits. Federal regulations provide that if payment is not made within the cost reporting period, or within 75 days thereafter, the unpaid compensation is not includable in allowable costs either in the period earned or in the period when actually paid. This adjustment is made to reduce reimbursable

11

ADJUSTMENT NUMBER

EXPLANATION (continued)

costs claimed to reflect the decrease in accrued liabilities for the amount of unpaid compensation. (HCFA 15-906.4)

COST CENTER Administrative and General Director's Fees

$

(7 ?QQ)

10

MEDICAID VISIT STATISTICS

Visit logs examined during the audit showed that the provider made 879 total visits applicable to Medicaid Home Health Services rather than the 877 shown on the cost data form. An adjustment of 2 visits has been made to correct the statistical information.

MEDICAID VISITS BY DISCIPLINE Skilled Nursing Care Home Health Aide

Tota! ~djustment to Medicaid Visit Statistics

11

TOTAL AGENCY VISIT STATISTICS

Visit Jogs examined during the audit showed that the provider made 36,990 total visits applicable to Medicaid reimbursable disciplines rather than the 37,057 shown on the cost data form. An adjustment of67 visits has been made to correct the statistical information.

AGENCY VISITS BY DISCIPLINE

Skilled Nursing Care

(14)

Physical Therapy

(23)

Occupational Therapy

(1)

Home Health Aide

(29)

Total Adjustment to Total Agency Visit Statistics

(67)

12

CLAUDE L VICKERS
STATE AUDITOR

DEPARTMENT OF AUDITS
MEDICAID AND LoCAL GOVERNMENT AUDITS
254 Washington Street, S.W., Suite 322 Atlanta, Georgia 30334-8400
Telephone (404) 656-2006 Facsimile (404) 656-7535
MANAGEMENT COMMENT LETTER

MICHAELA. PLANT DIRECTOR

Georgia Department of Medical Assistance Home Health Services Program Atlanta, Georgia
and Management Officials of Georgia Home Health Care Agency, Inc.
We have audited the records and documentation supporting parts I and II ofthe Medicaid Cost Data Form filed by Georgia Home Health Care Agency, Inc., in connection with the Medicaid Home Health Services Program for the year ended April 30, 1994. Our audit included a limited consideration of the organization's internal control structure sufficient to plan the audit. Our consideration for this limited purpose would not necessarily disclose all reportable conditions in the internal control structure. Accordingly, we do not express an opinion on the internal control structure.
However, as a result of this audit, conditions were noted that we believe are weaknesses which should be addressed by management. In our audit we found that:
The provider could not provide an accurate listing of accounts receivable balances by patient and payor source reconcilable to general ledger control totals.
The provider did not maintain adequate records to account properly for denied Medicaid claims.
As a participant in the Medicaid Home Health Services Program, the Provider has the responsibility of compliance with program policies and procedures, particularly with provisions of the Federal Provider Reimbursement Manual. Section 2304 of this publication states:
13

"Cost information as developed by the provider must be current, accurate, and in sufficient detail to support payments made for services rendered to beneficiaries. This includes all ledgers, books, records and original evidences of cost (purchase requisitions, purchase orders, vouchers, requisitions for materials, inventories, labor time cards, payrolls, bases for apportioning costs, etc.) which pertain to the determination ofreasonable cost, capable ofbeing audited." The provider should take corrective action to resolve the audit findings mentioned above. This management comment letter is related to findings noted during an audit of Parts I and II of the Medicaid Cost Data Form tiled in connection with the Medicaid Home Health Services Program by Georgia Home Health Care Agency, Inc., for the year ended April 30, 1994. This letter and the related audit report are intended to be used solely in connection with the administration of the Medicaid Home Health Services Program.
GEORGIA DEPARTMENT OF AUDITS
14