Audit report, schedule of reimbursable costs and agency visit statistics, Saint Mary's Home Health Care Services, Athens, Georgia, Medicaid provider number 00041357A, for the year ended September 30, 1994, Georgia Dept. of Medical Assistance

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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 SAINT MARY'S HOME HEALTH CARE SERVICES
ATHENS, GEORGIA MEDICAID PROVIDER NO. 00041357A FOR THE YEAR ENDED SEPTEMBER 30, 1994 GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE
Report Prepared By: State a/Georgia
Department ofAudits and Accounts Medicaid and Local Govemment Audits Division
254 Washington Street, S. W., Suile 322 Atlanta, Georgia 30334-8400 (404) 656-2006 Nfichael A. Plant, Director

SAINT MARY'S HOME HEALTH CARE SERVICES -TABLE OF CONTENTS -

AUDITOR'S REPORT

V

SCOPE OF TIIB AUDIT

SCHEDULE OF REIMBURSABLE COSTS

NOTES TO SCHEDULE

SUMMARY OF FIELD AUDIT ADJUSTMENTS

EXPLANATION OF FIELD AUDIT ADJUSTMENTS

APPENDIX

MANAGEMENT COMMENT LETTER

II

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
May 26, 1995

Home Health Services Program Division of Non-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 of Medical Assistance under the Title XIX Medicaid Program by Saint Mary's Health Care Systems, Inc., d/b/a Saint Mary's Home Health Care Services for the year ended September 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 Saint Mary's Health Care Systems, Inc., d/b/a Saint Mary's Home Health Care Services. 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.
V

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 Saint Mary's Health Care Systems, Inc., d/b/a Saint Mary's Hospital of Athens. This report, and any adjustments to the costs allocated to Saint Mary's Health Care Systems, Inc., d/b/a Saint Mary's Home Health Care Services are the responsibility ofthe Medicare intermediary. The amount of adjustments, if any, are not known to us and may be material.
As described in Note I 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 ofthe assets, liabilities, revenues and expenses of Saint Mary's Health Care Systems, Inc., d/b/a Saint Mary's Home Health Care Services 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 Saint Mary's Health Care Systems, Inc., d/b/a Saint Mary's Home Health Care Services for the year ended September 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.
R,;;l:~

CLV/kw/by

Claude L. Vickers State Auditor

vii

SAINT MARY'S HOME HEALTH CARE SERVICES SCOPE OF THE AUDIT
FOR THE YEAR ENDED SEPTEMBER 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 indirect costs allocated to the home health agency from Saint Mary's Hospital of Athens. 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 detennine 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 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.

SAINT MARY'S HOME HEALTH CARE SERVICES SCHEDULE OF REIMBURSABLE COSTS AND AGENCY VISIT STATISTICS
FOR THE YEAR ENDED SEPTEMBER 30, 1994

REIMBURSABLE COSTS

PER COST DATAFORM
AS FILED

Skilled Nursing Care Physical Therapy Speech Therapy Occupational Therapy Home Health Aide

$

2,757,047

736,961

162,484

121,692

1378481

Total Reimbursable Costs $

5 J 56 665

FIELD AUDIT ADWSTMENTS

$

(11,823)

(4,101)

(900)

(677)

{6,363)

$

[23 864)

ADWSTED TOTALS
$ 2,745,224 732,860 161,584 121,015
1 372 118
$ 5 132 SQ)

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

2,959 504 157 64
I 226
4 910

(10)

2,949

(9)

495

157

64

20

1 246

4 911

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

28,543 7,758 1,325 778
40 132
ZS 536

I

28,544

(1)

7,757

(3)

1,322

1

779

102

40 234

100

ZS 636

2

SAINT MARY'S HOME HEALTH CARE SERVICES NOTES TO SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 1994
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ENTITY INFORMATION
Saint Mary's Home Health Care Services provides home health services to residents of Banks, Barrow, Clarke, Elbert, Franklin, Greene, Jackson, Madison, Morgan, Oconee, Oglethorpe, and Walton counties. The residents of this twelve county area are served through the provider's offices in Athens, Georgia. The agency was operated by Saint Mary's Hospital of Athens 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 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 of the 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

SAINT MARY'S HOME HEALTH CARE SERVICES NOTES TO SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 1994

TOTAL AGENCY
COST

TOTAL AGENCY
VISITS

AGENCY COST
EER.Y!.filI

MEDICAID VISITS

MEDICAID COST

MEDICAID VISITS

AGGREGATE COST
PER VISIT

Skilled Nursing Care $ Physical Therapy Speech Therapy Occupational Therapy Home Health Aide

Total

$

2,745,224 732,860 161,584 121,015
I 372 118
5,132,801

28,544 $ 7,757 1,322 779
40234
78,636

96.18 94.48 122.23 I 55.35 34.10

2,949 $ 495 157 64
I 246
4,911 $

283,635 46,768 19,190
9,942 42489
402,024

4,911 $

81.86

SAINT MARY'S HOME HEALTH CARE SERVICES SUMMARY OF FIELD AUDIT ADJUSTMENTS FOR THE YEAR ENDED SEPTEMBER 30, 1994

ADJUSTMENT NUMBER

REIMBURSABLE COSTS

SKILLED NURSING CARE

1

Step Down of General Service Costs

$ (13,192)

2

Incorrect Expense Classifications

I 369 $ (I 1,823)

PHYSICAL THERAPY

I

Step Down of General Service Costs

$ (3,887)

2

Incorrect Expense Classifications

(2142

(4,101)

SPEECH THERAPY

Step Down of General Service Costs

$

(855)

2

Incorrect Expense Classifications

(45}

(900)

OCCUPATIONAL THERAPY

Step Down of General Service Costs

$

(642)

2

Incorrect Expense Classifications

(35}

(677)

HOME HEALTH AIDE

1

Step Down of General Service Costs

$ (6,769)

2

Incorrect Expense Classifications

(364)

3

Cost Report Adjustment Reversal

770

(6,363)

ADMINISTRATIVE AND GENERAL

I

Step Down of General Service Costs

$ 27,558

2

Incorrect Expense Classifications

(648)

4

Cost Not Related to Patient Care

(20,012)

5

Lack of Sufficient Documentation

(6 8982

0

Net Adjustment to Reimbursable Costs

$ (23 864)

5

SAINT MARY'S HOME HEALTH CARE SERVICES SUMMARY OF FIELD AUDIT ADJUSTMENTS FOR THE YEAR ENDED SEPTEMBER 30, 1994

ADWSTMENT
NUMBER

MEDICAID VISITS

6

Skilled Nursing Care

(10)

6

Physical Therapy

(9)

6

Home Health Aide

20

Net Adjustment to Medicaid Visit Statistics

TOTAL AGENCY VISITS

7

Skilled Nursing Care

1

7

Physical Therapy

(1)

7

Speech Therapy

(3)

7

Occupational Therapy

I

7

Home Health Aide

102

Net Adjustment to Total Agency Visit Statistics

100

6

SAINT MARY'S HOME HEALTH CARE SERVICES EXPLANATION OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED SEPTEMBER 30, 1994

ADWSTMENT 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 ofthe 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

$ (13,192)

Physical Therapy

(3,887)

Speech Therapy

(855)

Occupational Therapy

(642)

Home Health Aide

(6,769)

Administrative and General

Incorrect Expense Classifications

$ 648

Costs Not Related to Patient Care

20,012

Lack of Sufficient Documentation

6 898

27 558

Net Adjustment to Reimbursable Costs (1)

$

2 213

(1) A total of $(2,213) was stepped down to other cost centers which do not receive Medicaid reimbursement and are, therefore, not included in this report.

2

INCORRECT EXPENSE CLASSIFICATIONS

Documentation examined during the audit showed that expenses for contracted nursing services were not properly classified. 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 reclassify costs to the appropriate cost centers. (HCFA 15-2304)

7

ADillSTMENT NUMBER

EXPLANATION (continued}

COST CENTER Skilled Nursing Care Physical Therapy Speech Therapy Occupational Therapy Home Health Aide Administrative and General

$

1,369

(214)

(45)

(35)

(364)

(648)

Net Adjustment to Reimbursable Costs (1)

$

63

(1) A total of $(63) was reclassified to other cost centers which do not receive Medicaid reimbursement and are, therefore, not included in this report.

3

COST REPORT ADmSTMENT REVERSAL

An adjustment was made during the cost report preparation to segregate expenses related to personal care aide visits. Documentation examined during the audit showed that the statistics used to allocate these costs were incorrect. This adjustment is made to reverse a portion of the cost report adjustment. (HCFA 15-2304)

COST CENTER Home Health Aide

$

770

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; OMA Policies and Procedures Section 1001.2(), (h))

8

ADJUSTMENT NUMBER

EXPLANATION (continued}

Items Advertising Association Dues (50%) Gifts and Promotional Items Hospice Expense Hospital Expense Marketing Expense

COST CENTER Administrative and General

$

(237)

(5,763)

(1,447)

(281)

(16)

(12,268}

$ f?QQJ2)

$ (2QQJ2)

5

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

$ (6 898}

6

MEDICAID VISIT STATISTICS

Visit logs examined during the audit showed that the provider made 4,911 total visits applicable to Medicaid Home Health Services rather than the 4,910 shown on the cost data form. An adjustment of I visit has been made to correct the statistical information.

MEDICAID VISITS BY DISCIPLINE

Skilled Nursing Care

(10)

Physical Therapy

(9)

Home Health Aide

20

Net Adjustment to Medicaid Visit Statistics

9

ADJUSTMENT
NUMBER

EXPLANATION (continued)

7

TOTAL AGENCY VISIT STATISTICS

Visit logs examined during the audit showed that the provider made 78,636 total visits applicable to Medicaid reimbursable disciplines rather than the 78,536 shown on the cost data form. An adjustment of 100 visits has been made to correct the statistical information.

AGENCY VISITS BY DISCIPLINE

Skilled Nursing Care

1

Physical Therapy

(])

Speech Therapy

(3)

Occupational Therapy

1

Home Health Aide

102

Net Adjustment to Total Agency Visit Statistics

]QQ

10

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 (40-1) 656-2006 Facsimile (-10-1) 656-7535
MANAGEMENT COMMENT LETTER

MICHAEL A. PLANT
DIRECTOR

Georgia Department of Medical Assistance Home Health Services Program Atlanta, Georgia
and Management Officials of Saint Mary's Home Health Care Services
We have audited the records and documentation supporting parts I and II of the Medicaid Cost Data Form filed by Saint Mary's Home Health Care Services in connection with the Medicaid Home Health Services Program for the year ended September 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:
Some of the original source documents supporting agency visit statistics had been destroyed. Documentation supporting adjustments to agency visit statistics was not maintained in a logical and organized manner.
Expenses claimed on the cost data form included items not related to patient care operations.
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:
"Cost information as developed by the provider must be current, accurate, and in sufficient detail to support payments made for services rendered to
11

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 of Parts I and II of the Medicaid Cost Data Form filed in connection with the Medicaid Home Health Services Program by Saint Mary's Home Health Care Services for the year ended September 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
12