Audit report, for the year ended June 30, 1996, The Bell-Minor Home, Inc., Medicaid provider no. 00059397A, Nursing Facilities Services Program

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DEPARTMENT OF AUDITS AND ACCOUNTS Medicaid and Local Government Audits

AUDIT REPORT . FORTHE YEAR.ENDED JUNE 30, 1996
THE BELL-MINOR HOME, INC..
MEDICAID PROVIDERNUMBER 00059397A NURSING FACILITIES SERVICES PROGRAM

TABLE OF CONTENTS
LETTER OF TRANSMITTAL ............................. 9 i
INTRODUCTION ......................................... 1
FINDINGS AND RECOMMENDATIONS .................... 4 Summary of Audit Findings Affecting Allowable Costs and Patient Day Statistics 7 Schedule of Allowable Costs and Patient Day Statistics 8

Report Prepared By:
State ofGeorgia Department ofAudits and Accounts Medicaid and Local Government Audits Division 254 Washington Street, S. W., Suite 322
Atlanta, Georgia 30334-8400 (404) 656-2006
Michael A. Plant, Director

CLAUDE L. VICKERS
STATE AUDITOR

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

November 10, 1997

Members of the Board of Medical Assistance, and The Honorable Dr. William R. Taylor, Acting Commissioner Department of Medical Assistance 2 Peachtree Street, N.W., 40th Floor 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 year ended June 30, 1996. This report is intended to be used solely in connection with the administration of the Georgia Department of Medical Assistance Nursing Facilities Services Program and is not to be used or relied upon for any other purpose.
Respectfully Submitted,

CLV/cm/bw

Claude L. Vickers State Auditor

1996 Audit Report: The Bell-Minor Home, Inc.

1

INTRODUCTION

General Information

The Georgia Medical Assistance Program (Medicaid) is administered by the Georgia Department of Medical Assistance and is jointly funded by the State ofGeorgia and the federal government. Medicaid pays health care providers for furnishing health care services to individuals or families with low income and limited resources. The Department ofMedical Assistance has established specific payment guidelines and limitations for each covered medical service.
Through the Nursing Facilities Services Program, Medicaid pays for care in institutional settings for recipients who are unable to remain at home or in the community. Nursing homes are paid for this service using rates calculated from Nursing Home Cost Reports submitted by each provider. These cost reports include financial, patient census, and other information. Information included in the Nursing Home Cost Report is subject to audit by the Department of Medical Assistance or its agents. In an agreement with the Department of Medical Assistance, the Department of Audits and Accounts has accepted the responsibility of auditing Medicaid providers.

Provider Information

The Bell-Minor Home, Inc., a 92-bed long-term health care facility located in Gainesville, Georgia, is a provider enrolled in the Georgia Medicaid Nursing Facilities Services Program. The facility provides both skilled and intermediate care services to resident patients. The

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Nursing Facilities Services Program

Audit Objectives

facility was operated as a :freestanding nursing home for the year ended June 30, 1996.

The pwpose ofthis audit was to determine whether The Bell-Minor Home, Inc., maintained adequate documentation to support the allowable costs and patient day statistics reported in its Nursing Home Cost Report for the year ended June 30, 1996; and to determine whether The Bell-Minor Home, Inc., complied with the federal and state laws, regulations, policies and procedures for the Nursing Facilities Services 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;



compare patient day statistics included in the cost

report to provider records to determine if the patient

day statistics are accurately reported; and



recommend appropriate action based on the results of

our audit.

1996 Audit Report: The Bell-Minor Home, Inc.

3

Scope and Methodology

To accomplish these objectives, we performed a limited review ofthe provider's internal control structure to the extent necessary to plan our audit. 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 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 Procedures for Nursing Facility Services.
The Department ofAudits and Accounts is responsible for providing the Department ofMedical Assistance with information regarding the accuracy of cost and patient data for The Bell-Minor Home, Inc., for the year ended June 30, 1996. If the Department of Medical Assistance implements the recommendations in this report by adjusting the allowable costs and/or patient day statistics used in calculating the provider's billing rate, the provider may appeal to the Department of Medical Assistance for reconsideration of the audit findings. For this reason, we have not included a response from the provider in our report. However, we have discussed the contents of this report with the provider and have considered its responses when preparing the report. In all other respects, this audit was conducted in accordance with generally accepted government auditing standards.

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Nursing Facilities Services Program

FINDINGS AND RECOMMENDATIONS

Finding No. J

Incorrect Expense Classifications

Documentation examined during the audit showed that some of the expenses were not classified in accordance with the Uniform Chart of Accounts prescribed by the Department of Medical 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 following adjustment to reclassify costs to the appropriate cost centers.
(OMA Policies and Procedures, Appendix. D)

COST CENTER Routine Services Education Expense Special Services Cable Television Contracted Services Supplies Telephone Dietary Contracted Services Supplies Operation and Maintenance Cable Television Administrative and General Communication Expense Education Expense Insurance Expense Telephone Lease Expense Property and Related Expenses Insurance Expense Telephone Lease Expense

$

(580)

$

377

662

(5,046)

(574)

(4,581)

$

(662)

5,136

4,474

(377)

$

574

580

7,913

3,627

12,694

$ (7,913) (3,717)

(11,630)

Total Adjustment to Allowable Costs

$

0

1996 Audit Report: The Bell-Minor Home, Inc.

5

Finding No.2

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 2102.1, 2102.3, 2106.l; OMA Policies and Procedures Section 902)

ITEMS Cable Television Personal Use of Vehicle Prescription Drugs

$

(4,706)

(3,757)

(478)

$

(8.941)

COST CENTER Special Services Operation and Maintenance of Plant Administrative and General Property and Related Expenses
Total Adjustment to Allowable Costs

$

(478)

(5,193)

(2,418)

(852)

$==(=8=.94=1=)

Finding No.3

Accrual Basis ofAccounting
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

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Nursing Facilities Services Program

are incurred, regardless of when they are paid. We recommend that the provider implement policies and procedures to ensure that costs are recorded in the period in which they are incurred. We recommend that the Department ofMedical Assistance make the following adjustment to decrease allowable costs claimed for expenses not applicable to the year under review.
(HCFA Pub. 15-1 Section 2302.1)

Adjustments to Balance Sheet Accounts:

Allowable Costs

June 30, 1995 Balance Accounts Payable
June 30, 1996 Balance Accounts Payable
Total Adjustment to Allowable Costs

$===(=1=20=)
$===(=3=60=) $===(=4=80=)

COST CENTER Administrative and General Property and Related Expenses
Total Adjustment to Allowable Costs

$

(120)

(360)

$===(=4=80=)

1996 Audit Report: The Bell-Minor Home, Inc.

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SUMMARY OF AUDIT FINDINGS AFFECTING ALLOWABLE COSTS AND PATIENT DAY STATISTICS

FINDING NUMBER

ALLOWABLE COSTS

Routine Services

1

Incorrect Expense Classifications

$

Special Services

1

Incorrect Expense Classifications

2

Costs Not Related to Patient Care

$

(4,581)

(478)

Dietary

1

Incorrect Expense Classifications

Operation and Maintenance ofPlant

1

Incorrect Expense Classifications

2

Costs Not Related to Patient Care

$

(377)

(5,193)

Administrative and General

1

Incorrect Expense Classifications

2

Costs Not Related to Patient Care

3

Accrual Basis of Accounting

$

12,694

(2,418)

(120)

Property and Related Expenses

1

Incorrect Expense Classifications

2

Costs Not Related to Patient Care

3

Accrual Basis of Accounting

$ (11,630) (852) (360)

Total Audit Findings Affecting Allowable Costs

$

(580) (5,059) 4,474 (5,570)
10,156
(12,842) (9,421)

SCHEDULE OF ALLOWABLE COSTS AND PATIENT DAY STATISTICS

00

ALLOWABLE COSTS

COST REPORT TOTALS

OFFICE AUDIT FINDINGS (1)

FIELD AUDIT FINDINGS

AUDITED TOTALS

Routine Services

$ 1,078,906

$

(580) $ 1,078,326

Special Services

115,196 $

(6,801)

(5,059)

103,336

Dietary

390,474

4,474

394,948

Laundry and Housekeeping

217,244

217,244

Operation and Maintenance of Plant

218,467

(20,002)

(5,570)

192,895

Administrative and General

406,289

(77,761)

10,156

338,684

Property and Related Expenses

355,842

(12,842)

343,000

Total Allowable Costs

$ 2,782,418 $

(104,564) $

(9,421) $ 2,668,433

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PATIENT DAY STATISTICS

33,327

33,327

00

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(1) An office audit of the provider was performed before this field audit. The results of the office audit are included in this column for informational purposes.

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