Audit report, schedule of reimbursable costs and agency visit statistics, St. Joseph Hospital Home Health Care, Augusta, Georgia, Medicaid provider no. 00041346A, for the year ended June 30, 1994, Georgia Department of Medical Assistance [June 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 ST. JOSEPH HOSPITAL HOME HEALTH CARE
AUGUSTA, GEORGIA MEDICAID PROVIDER NO. 00041346A FOR THE YEAR ENDED JUNE 30, 1994 GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE
Report Prepared By: State ofGeorgia
Department ofAudits andAccounts Medicaid and Local Govemment Audits Division
254 Washington Street, S. W, Suite 322 Atlanta, Georgia 30334-8400 (404) 656-2006 Michael A. Plant, Director

ST. JOSEPH HOSPITAL HOME HEALTH CARE - TABLE OF CONTENTS -

AUDITOR'S REPORT

iii

SCOPE OF THE AUDIT

SCHEDULE OF REIMBURSABLE COSTS

2

NOTES TO SCHEDULE

3

SUMMARY OF FIELD AUDIT ADJUSTMENTS

5

EXPLANATION OF FIELD AUDIT ADJUSTMENTS

7

APPENDIX MANAGEMENT COMMENT LETTER

CLAUDE L VICKERS
STATE AUDITOR

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
Telephone (404) 656--2006 Facsimile (404) 656--7535
September 27, 1995

Home Health Services Program Division ofNon-Institutional Reimbursement Georgia Department of Medical 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 of Medical Assistance under the Title XIX Medicaid Program by St. Joseph Hospital, Augusta, Georgia, Inc., d/b/a St. Joseph Hospital Home Health Care for the year ended June 30, 1994, and have compiled the accompanying Schedule of Reimbursable Costs and Agency Visit Statistics based on our audit. The Medicaid Cost Data Form is the responsibility of the management of St. Joseph Hospital, Augusta, Georgia, Inc., d/b/a St. Joseph Hospital Home Health Care. 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 of the Medicaid Cost Data Form, to the Georgia Department ofMedical 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.
lll

Our audit was limited to the direct costs of the home health agency and did not include tests ofthe Medicare cost report, form HCFA-2552, filed by St. Joseph Hospital, Augusta, Georgia, Inc.
This report, and any adjustments to the costs allocated to St. Joseph Hospital, Augusta, Georgia, Inc.,
d/b/a St. Joseph Hospital Home Health Care are the responsibility of the Medicare intermediary. The amount of adjustments, if any, are not known to us and may be material.
As descnbed in Note 1 ofthe Notes to Schedule, the accompanying Schedule of Reimbursable Costs and Agency Visit Statistics was prepared to present the data necessary for the Georgia Department of Medical 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 of the assets, liabilities, revenues and expenses of St. Joseph Hospital, Augusta, Georgia, Inc., d/b/a St. Joseph Hospital Home Health Care on the basis described.
In our opinion, except for the effects of the matter discussed in the third paragraph, the "adjusted totals" column in the accompanying Schedule of Reimbursable 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 St. Joseph Hospital, Augusta, Georgia, Inc., d/b/a St. Joseph Hospital Home Health Care for the year ended June 30, 1994, on the basis of accounting described in Note 1.
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.
Respectfully submitted,
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Claude L. Vickers State Auditor
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V

ST. JOSEPH HOSPITAL HOME HEALTH CARE SCOPE OF THE AUDIT
FOR THE YEAR ENDED JUNE 30, 1994
This audit was performed in order to determine if the reimbursable costs and agency visit statistics reported in parts I and II ofthe 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 ofthe 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 indirect costs allocated to the home health agency from St. Joseph Hospital. These indirect cost allocations result from the step-down ofgeneral service costs from the hospital as shown on the Medicare cost report Worksheet B, Parts I and II. Our audit did not include tests of either these indirect costs or the reclassifications and adjustments made to determine net expenses for cost allocation on the Medicare cost report worksheets. These costs are subject to audit by the Medicare intermediary.
Costs reported in Part II ofthe Medicaid Cost Data Form also include the direct costs of the home health agency. These costs are comprised ofboth the direct costs of providing the reimbursable services and the home health indirect costs allocated to them. These indirect cost allocations result from the stepdown of the home health agency's general service costs on the Medicare cost report. 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 the 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.
1

ST. JOSEPH HOSPITAL HOME HEALTH CARE SCHEDULE OF REIMBURSABLE COSTS AND AGENCY VISIT STATISTICS FOR THE YEAR ENDED JUNE 30, 1994

REIMBURSABLE COSTS
Skilled Nursing Care Physical Therapy Speech Therapy Occupational Therapy Home Health Aide
Total Reimbursable Costs

PER COST DATAFORM
AS FILED

FIELD AUDIT ADWSTMENTS

ADWSTED TOTALS

$

5,844,228 $

1,230,063

250,625

272,873

2 948 547

(16,670) $ (3,508) (715) (778)
(11,551)

5,827,558 1,226,555
249,910 272,095 2,936,996

$ JO 546 336 $

(33 222) $ JO 5)3114

MEDICAID VISITS
Skilled Nursing Care Physical Therapy Speech Therapy Occupational Therapy Home Health Aide
Total Medicaid Visits

4,286 564 169 152
3 376
8 547

(159) (11) (11) (3) (29)
(2)3)

4,127 553 158 149
3 347
8 334

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

64,907 10,580 2,142 2,432 97 599
177 660

64,907 10,580 2,142 2,432 97 599
177 660

2

ST. JOSEPH HOSPITAL HOME HEALTH CARE NOTES TO SCHEDULE
FOR THE YEAR ENDED JUNE 30, 1994
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ENTITY INFORMATION
St. Joseph Hospital Home Health Care provides home health services to residents ofBurke, Columbia, Emanuel, Glascock, Hancock, Jefferson, Jenkins, Johnson, Lincoln, McDuffie, Richmond, Screven, Taliaferro, Warren, Washington, and Wilkes counties. The residents of this sixteen county area are served through the provider's offices in Augusta, Georgia. The agency was operated by St. Joseph Hospital and is classified as a hospital-based home health agency.
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 ofMedical 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 of the Georgia Department ofMedical 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

ST. JOSEPH HOSPITAL HOME HEALTH CARE NOTES TO SCHEDULE
FOR THE YEAR ENDED JUNE 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 Speech Therapy Occupational Therapy Home Health Aide

5,827,558 1,226,555
249,910 272,095 2,936,996

Total

$ 10,513,114

64,907 $ 10,580 2,142 2,432 97 599
177,660

89.78 115.93 116.67 111.88 30.09

4,127 $ 553 158 149
3 347
8,334 $

370,522 64,109 18,434 16,670 100 711
570,446

8,334 $

68.45

ADJUSTMENT NUMBER

ST. JOSEPH HOSPITAL HOME HEALTH CARE SUMMARY OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED JUNE 30, 1994
REIMBURSABLE COSTS

SKILLED NURSING CARE

1

Step Down of General Service Costs

$ (16,670)

PHYSICAL THERAPY

1

Step Down of General Service Costs

(3,508)

SPEECH THERAPY

1

Step Down of General Service Costs

(715)

OCCUPATIONAL THERAPY

1

Step Down of General Service Costs

(778)

HOME HEALTH AIDE

1

Step Down of General Service Costs

$

(9,495)

2

Related Party Costs

(2,056)

(11,551)

ADMINISTRATIVE AND GENERAL

1

Step Down of General Service Costs

$

32,624

3

Lack of Sufficient Documentation

(2,575)

4

Costs Not Related to Patient Care

(30,049)

0

Net Adjustment to Reimbursable Costs

$ ,33 222)

5

ADJUSTMENT
NUMBER

ST. JOSEPH HOSPITAL HOME HEALTH CARE SUMMARY OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED JUNE 30, 1994
MEDICAID VISITS

5

Skilled Nursing Care

5

Physical Therapy

5

Speech Therapy

5

Occupational Therapy

5

Home Health Aide

Total Adjustment to Medicaid Visit Statistics

(159) (11) (11) (3) (29)
<213)

6

ST. JOSEPH HOSPITAL HOME HEALTH CARE EXPLANATION OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED JUNE 30, 1994

ADIDSTMENT NUMBER

EXPLANATION

1

STEP DOWN OF GENERAL SERVICE COSTS

General service costs ofthis provider are stepped down to the other cost centers on Worksheet H-4 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 2552)

COST CENTER Skilled Nursing Care Physical Therapy Speech Therapy Occupational Therapy Home Health Aide Administrative and General Lack of Sufficient Documentation Costs Not Related to Patient Care

$
$ 2,575 30,049

(16,670) (3,508) (715) (778) (9,495)
32,624

Net Adjustment to Reimbursable Costs (1)

$====1l::!:4:!:!::::58~

(1) A total of $(1,458) was stepped down to other cost centers which do not receive Medicaid reimbursement and are, therefore, not included in this report.

2

RELATED PARTY COSTS

Documentation examined during the audit showed that the provider paid for contracted services obtained from related parties. Federal regulations provide that costs applicable to services, facilities, and supplies furnished by related organizations are includable in the allowable cost of the provider at the cost to the related

7

ADWSTMENT NUMBER

EXPLANATION (continued)

organization. This adjustment is made to reduce reimbursable costs to the related parties' cost. (HCFA 15-1000)

COST CENTER Home Health Aide

$

(2 056)

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)

COST CENTER Administrative and General

$====:!(2!!!1:!:57:!::::=51::1!,)=

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; DMA Policies and Procedures Section 1001.2 (b), (f), (h))

8

ADJUSTMENT NUMBER

EXPLANATION (continued)

Items Advertising Association Dues (50%) Civic Organization Dues Donations Fraternal Organization Dues Hospice Salaries and Employee Benefits Legal Fees Legislative and Regulatory Conference Marketing Expense

COST CENTER Administrative and General

$

(10,825)

(6,288)

(100)

(1,926)

(225)

(2,927)

(5,000)

(1,521)

{1,237)

$,==='~30!i!:ll::!i!:04::!:::9=il!)=

$,==='~30!i!:ll::!i!:04::!:::9=il!)=

5

MEDICAID VISIT STATISTICS

Visit logs examined during the audit showed that the provider made 8,334 total visits applicable to Medicaid Home Health Services rather than the 8,547 shown on the cost data form. An adjustment of 213 visits has been made to correct the statistical information.

MEDICAID VISITS BY DISCIPLINE Skilled Nursing Care Physical Therapy Speech Therapy Occupational Therapy Home Health Aide

(159) (11) (11) (3) (29)

Total Adjustment to Medicaid Visit Statistics

(213)

9

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 Faeslmile (404) 656-7535
MANAGEMENT COMMENT LETTER

MICHAEL A. PLANT
DIRECTOR

Georgia Department ofMedical Assistance Home Health Services Program Atlanta, Georgia
and Management Officials of St. Joseph Hospital Home Health Care
We have audited the records and documentation supporting parts I and Il of the Medicaid Cost Data Form filed by St. Joseph Hospital Home Health Care in connection with the Medicaid Home Health Services Program for the year ended June 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 failed to remove denied Medicaid visits from Medicaid visit statistics.
Transactions with related parties were not properly accounted for or reported on the cost data form.
As a participant in the Medicaid Home Health Services Program, the Provider has the responsibility ofcompliance with program policies and procedures, particularly with provisions of the Federal Provider Reimbursement Manual. Section 2304 of this publication states:

"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 of reasonable cost, capable of being 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 ofParts I and II of the Medicaid Cost Data Form filed in connection with the Medicaid Home Health Services Program by St. Joseph Hospital Home Health Care for the year ended June 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
11