Audit report, for the eleven month period ended June 30, 1995, The Bell-Miner Home, Inc., Medicaid provider no. 00059397A, Nursing Facilities Services Program

. DEPARTMENTOFA:lJDITS
Medicaid and Loca[Gov~~nment'Audits
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. . . . AUD.IT REPORT ...

FOR THE]fLEVEN1\10NTH.,
PERIOI) ENDED ~}}30,)995

. . -TIIE.BELL-MINORHOJ\1]~:,INC..

. MEDICAID PR()VIIl~~IfNU'l\1,E~~0059397A ...

NURSING FACILITIES

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SERVICES ' '

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PRO . , . -GRAM,

TABLE OF CONTENTS
LETTER OF TRANSMITTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
IN"TRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
FIN"DIN"GS AND RECOMMENDATIONS ................... 3 Summary of Audit Findings Affecting Allowable Costs and Patient Day Statistics 7 Schedule of Allowable Costs and Patient Day Statistics 8

CLAUDE L VICKERS
STA"IE AUDITOR

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
Telephone (404) 656-2006 Facsimile (404) 656-7535
January 3, 1996

Members of the Board ofMedical Assistance, and The Honorable Marge Smith, Commissioner Department ofMedical Assistance 2 Peachtree Street, N.W., Suite 27-100 Atlanta, Georgia 30303
Ladies and Gentlemen:
This report provides the results of our audit of The Bell-Minor Home, Inc., provider number 00059397A, a participant in the Nursing Facilities Services Program for the eleven month period ended June 30, 1995. This report is intended to be used solely in connection with the administration ofthe Georgia Department of Medical Assistance Nursing Facilities Services Program and is not to be used or relied upon for any other purpose.
Respectfully Submitted,
~~
Claude L. Vickers State Auditor
CLV/dm/bw

1995 Audit Report: The Bell-Minor Home, Inc.

1

INTRODUCTION

Provider Information

The Bell-Minor Home, Inc., is a 92-bed long-term health care facility located in Gainsville, Georgia. The facility provides both skilled and intermediate care services to resident patients. The facility was operated as a freestanding nursing home for the eleven month period ended June 30, 1995.

Audit Objectives

The purpose ofthis audit was to determine whether The Bell-Minor Home, Inc., a provider enrolled in the Georgia Medicaid Nursing Facilities services (NFS) Program, maintained adequate documentation to support the allowable costs and patient day statistics reported in its Nursing Home Cost Report for the eleven month period ended June 30, 1995; and to determine whether The Bell-Minor Home, Inc. complied with the federal and state laws, regulations, policies and procedures for the NFS Program in effect for that period. The specific objectives of this audit were to:



determine if allowable costs reported in the Nursing

Home Cost Report are reasonable and allowable, in all

material respects, in accordance with federal and state

laws, regulations, policies and procedures governing

the Georgia Nursing Facilities Services Program;

2
Scope and Methodology

Nursing Facilities Services Program



determine if patient day statistics included in the cost

report are accurately reported;



recommend appropriate action based on the results of

our audit.

To accomplish these objectives, we interviewed provider personnel and examined records and documentation to determine the adequacy of amounts and disclosures included in the Nursing Home Cost Report. We performed a limited review of the provider's internal control structure to the extent necessary to plan our audit. We also reviewed, on a test basis, evidence supporting these amounts and disclosures and assessed the accounting principles used and significant estimates made by management. We evaluated the tested transactions and accounts for compliance with cost reporting principles included in the Health Care Financing Administration Provider Reimbursement Manual (HCFA Pub. 15-1) and DMA Policies and Proceduresfor Nursing Facility Services.

1995 Audit Report: The Bell-Minor Home, Inc.

3

FINDINGS AND RECOMMENDATIONS

Finding No.1

Costs Not Related to Patient Care

Allowable costs claimed 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 allowable costs. We recommend that the provider implement policies and procedures to ensure that expenses claimed in the cost report do not include items not related to patient care. We recommend that the Department of Medical Assistance make the following adjustment to remove the non-patient care expenses from allowable costs.
(HCFA Pub.15-1 Sections 2102.3, 2104.1; DMA Policies and Procedures Sections 902)

ITEMS Ambulance Services Prescription Drugs

$

(220)

(312)

COST CENTER Routine Services Special Services
Total Adjustment to Allowable Costs

$

(220)

(312)

$===='5==3!=!:2!=)

4

Nursing Facilities Services Program

Finding No. 2

Incorrect Expense Classifications

Documentation examined during the audit showed that some ofthe expenses were not. classified in accordance with the Uniform Chart of Accounts prescribed by the Department ofMedical Assistance for providers participating in the Medicaid Nursing Facilities Services Program. We recommend that the provider implement policies and procedures to ensure that all of its expenses are classified in the appropriate cost centers. We recommend that the Department of Medical Assistance make the fo11owing adjustment to reclassify costs to the appropriate cost centers.
(DMA Policies and Procedures, Appendix D)

COST CENTER Special Services Telephone Dietary Training Administrative and General Telephone Training

$

$

1,108

229

(1,108) (229)
1 337

Total Adjustment to Allowable Costs

$=======0=

Finding No. 3

Excess Compensation
A11owable costs claimed included compensation to employees which exceeded DMA maximum limitations. The Department of Medical Assistance annua11y calculates a11owable salary ceilings for various positions as we11 as maximum fees allowable for medical and corporate directors. We recommend that the provider implement policies and procedures to ensure that compensation to its employees which exceeds the DMA maximum limitations is excluded from allowable costs claimed. We recommend that the Department of Medical Assistance make the following adjustment to reduce a11owable costs by the amount ofcompensation paid in excess of the DMA guidelines, plus related employer's share of payroll taxes.
(DMA Compensation Ceilings; HCFA 15-906)

1995 Audit Report: The Bell-Minor Home, Inc.

5

Position Title
Dietary Supervisor Payroll Taxes
Maintenance Supervisor Payroll Taxes
Administrator Payroll Taxes
Assistant Administrator Payroll Taxes
Office Supervisor Payroll Taxes
Bookeeper Payroll Taxes

Total

Guideline

Compensation Ceiling (A)

Excess

$

32,318 $ 31,856 $

(462)

2,472

2,437

(35)

33,538

17,271

(16,267)

2,565

1,321

(1,244)

67,076

63,712

(3,364)

5,654

5,605

(49)

56,839

34,524

(22,315)

4,348

2,641

(1,707)

33,538

14,612

{18,926)

2,565

1,117

(1,448)

48,489

29,209

(19,280)

3 709

2,234

{1,475)

$ 293 111 $ 206 539 $ (86 572)

(A) Ceilings have been adjusted to percentage of full-time, where applicable.

COST CENTER Dietary Operation and Maintenance ofPlant Administrative and General
Total Adjustment to Allowable Costs

$

(497)

{17,511)

(68,564)

$ (86 572)

Finding No. 4

Lack ofSufficient Documentation
Some of the expenses included in allowable costs 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. We recommend that the provider implement policies and procedures to ensure that all expenses shown on the cost report are supported by sufficient documentation. We recommend that the

6

Nursing Facilities Services Program

Department of Medical Assistance make the following adjustment to remove the undocumented expenses from allowable costs.
(HCFA Pub. 15-1 Section 2304)

COST CEJ\.i-rrER Property and Related Expenses

$.==::::::=!!'2==4:!:!5~7=)

1995 Audit Report: The Bell-Minor Home, Inc.

7

SUMMARY OF AUDIT FINDINGS AFFECTING ALLOWABLE COSTS AND PATIENT DAY STATISTICS

FINDING NUMBER

ALLOWABLE COSTS

Routine Services

1

Costs Not Related to Patient Care

$

Special Services

1

Costs Not Related to Patient Care

2

Incorrect Expense Classifications

$

(312)

(1,108)

Dietary

2

Incorrect Expense Classifications

3

Excess Compensation

$

(229)

(497)

(220) (1,420)
(726)

Operation and Maintenance ofPlant

3

Excess Compensation

(17,511)

Administrative and General

2

Incorrect Expense Classifications

3

Excess Compensation

$

1,337

(68,564)

(67,227)

Property and Related Expenses

4

Lack of Sufficient Documentation

(2,457)

Total Audit Findings Affecting Allowable Costs

$ (892561)

8

Nursing Facilities Services Program

SCHEDULE OF ALLOWABLE COSTS AND PATIENT DAY STATISTICS

ALLOWABLE COSTS Routine Services Special Services Dietary Laundry and Housekeeping Operation and Maintenance ofPlant Administrative and General Property and Related Expenses

COST REPORT TOTALS

AUDIT FINDINGS

AUDITED TOTALS

$ 952,144 $

(220) $ 951,924

119,953

(1,420)

118,533

348,226

(726)

347,500

188,537

188,537

184,447

(17,511)

166,936

377,738

(67,227)

310,511

332,655

(2,457)

330,198

Total Allowable Costs

$ 2,503,700 $ (89,561) $ 2,414,139

PATIENT DAY STATISTICS

30,469

30,469