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DEPARTMENT OF AUDITS AND ACCOUNTS Medicaid and Local GovernmentAudits
AVJ)IT REPORT
,
,
FOR.THE YEAR ENDED JUNE.30, 1997
DUBLINAIR'HEALTH CARE CENTER
MEDICAID PROVIDER NUMBER 00059947A NURsING FACILITIES SERVICES PROGRAM
TABLE OF CONTENTS
LETTER OF TRANSMITTAL
i
INTRODUCTION
1
FINDINGS AND RECOMMENDATIONS
4
Summary of Audit Findings Affecting Allowable Costs and Patient Day Statistics 9
Schedule of Allowable Costs and Patient Day Statistics 11
Report Prepared By:
State ofGeorgia Department ofAudits and Accounts Medicaid and Local Government Audits Division
w., 254 Washington Street, S. 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
September 8, 1998
Members of the Board ofMedical Assistance, and The Honorable Dr. William R. Taylor, Commissioner Department ofMedical Assistance 2 Peachtree Street, N.W., 40th Floor Atlanta, Georgia 30303
Ladies and Gentlemen:
This report provides the results of our audit of Dublinair Health Care Center, provider number 00059947A, a participant in the Nursing Facilities Services Program for the year ended June 30, 1997. This report is intended to be used solely in connection with the administration ofthe Georgia Department ofMedical Assistance Nursing Facilities Services Program and is not to be used or relied upon for any other purpose.
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Claude L. Vickers State Auditor
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1997 Audit Report: Dublinair Health Care Center
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 of Georgia 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 of Medical 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
Dublinair Health Care Center, a 149-bed long-term health care facility located in Dublin, Georgia, is a provider enrolled in the Georgia Medicaid Nursing Facilities Services Program. The facility provides both skilled and intermediate care services to resident
2
Nursing Facilities Services Program
Audit Objectives
patients. The facility was owned and operated as a component of Care More, Management Co., Inc., a chain organization which filed a Home Office Cost Report with DMA for the year ended June 30, 1997.
The purpose ofthis audit was to detennine whether Dublinair Health Care Center 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, 1997; and to determine whether Dublinair Health Care Center 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:
detennine 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.
1997 Audit Report: Dublinair Health Care Center
3
Scope and Methodology
To accomplish these objectives, we perfonned 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/or Nursing Facility Services.
The Department ofAudits and Accounts is responsible for providing the Department ofMedical Assistance with infonnation regarding the accuracy ofcost and patient data for Dublinair Health Care Center for the year ended June 30, 1997. 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.
4
Nursing Facilities Services Program
FINDINGS AND RECOMMENDATIONS
Finding No.1
Incorrect Expense Classifications
Documentation examined during the audit showed that some of the expenses were not classified in accordance with the Unifonn 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.
(DMA Policies and Procedures, Appendix D)
COST CENTER Routine Services Mattresses Worker's Compensation Expense Special Services Cable Television Dietary Worker's Compensation Expense Laundry and Housekeeping Mattresses Worker's Compensation Expense Operation and Maintenance of Plant Cable Television Worker's Compensation Expense Administrative and General Insurance Expense Worker's Compensation Expense Property and Related Expenses Insurance Expense
$ (1,201) (2,468) $
$
1,201
(280)
$
(97)
(97)
$
3,386
3,135
(3,669) 97
(290)
921
(194)
6,521 (3,386)
Total Adjustment to Allowable Costs
$
0
1997 Audit Report: Dublinair Health Care Center
5
Finding No.2
Self-insurance Reserve Fund
Documentation examined during the audit showed that allowable costs claimed included contributions to a self-funded trust for workers' compensation insurance. Federal regulations provide that the amount oflosses paid by the fiduciary ofthe selfinsurance fund plus expenses related to these losses are allowable. We recommend that the provider implement policies and procedures to ensure that allowable expenses of the self-insurance reserve fund are included in the cost report. We recommend that the Department of Medical Assistance make the following adjustment to increase allowable costs that were paid by the self-insurance reserve fund
(HCFA Pub. 15-1 Sections 2161, 2162)
COST CENTER Routine Services Dietary Laundry and Housekeeping Operation and Maintenance ofPlant Administrative and General
$
1,414
166
161
55
63
Total Adjustment to Allowable Costs
$===1=,8=59=
Finding No.3
Nurse Aide Testing and Training Costs
Documentation examined during the audit showed that the provider did not remove nurse aide testing and training costs from allowable costs claimed as required by the Department of Medical Assistance in General Instructions to Cost Report. We recommend that the provider implement policies and procedures to ensure that nurse aide testing and training costs are not included in allowable costs. We recommend that the Department of Medical Assistance make the following adjustment to decrease allowable costs by the amount of nurse aide testing and training costs.
(DMA General Instructions to Cost Report)
6
Nursing Facilities Services Program
COST CENTER Routine Services
$===(=2=82=)
Finding No.4
Costs Not Related to Patient Care
Allowable costs claimed included cable television expense which was 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 Section 2106.1)
COST CENTER Operation and Maintenance ofPlant
$==(=::3=,7:=39::=)
Finding No.5
Allocationsfrom Home Office
The provider was a component of a chain organization for the year ended June 30, 1997. As a result of our audit ofthe home office cost report filed in connection with the Medicaid Nursing Home Facilities Program, we recommended that the Department ofMedical Assistance make adjustments to the allowable costs claimed by the home office. We recommend that the provider and its home office implement policies and procedures to ensure that only allowable costs are allocated from the home office to the provider. We recommend that the Department of Medical
1997 Audit Report: Dublinair Health Care Center
7
Assistance make the following adjustment to correct allowable costs to reflect the allocation of the adjustments made to the home office cost report.
(HCFA Pub. 15-1 Section 2150)
COST CENTER Administrative and General Pooled Costs Administrative Expenses Allocation Statistics
$ (15,283) (1,152)
Total Adjustment to Allowable Costs
$=====(1=6=.4=35:=)
Finding No.6
Patient Day Statistics
Census records examined during the audit showed that the nursing home had 52,880 patient days of service rather than the 52,892 shown on the cost report. 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 accumulate accurate patient day statistics. We recommend that the Department of Medical Assistance make the adjustment of 12 days to correct the statistical information.
(HCFA Pub. 15-1 Section 2304)
Finding No.7
Accounts Receivable Credit Balances
Documentation examined during the audit showed that the provider had numerous credit balances in its individual accounts receivable. Credit balances in the facility's accounts receivable result from overpayments for services provided to its patients. The $5,874.01 shown in the following table represents overpayments from the Department of Medical Assistance that had not been resolved as of June 30, 1997. We recommend that the provider review its credit accounts receivable and refund
8
Nursing Facilities Services Program
overpayments to the appropriate party. We further recommend that the provider implement policies and procedures to ensure that overpayments on patients' accounts are promptly refunded to the payor. We also recommend that the Department of Medical Assistance review this matter and recover any overpayments identified.
Patient Name
Bass, Ruby F. Bray, Christine B. Cooper, Mary B. Ely, Pauline S. Hall, Bertha M. Johnson, Mary H. McClendon, Geneva Mimbs, Edna Veal, Thelma B.
Total
Balance
$
352.85
975.48
806.06
51.82
58.07
821.84
150.24
418.32
2,239.33
$ 5,874.01
1997 Audit Report: Dublinair Health Care Center
9
SUMMARY OF AUDIT FINDINGS AFFECTING ALLOWABLE COSTS AND PATIENT DAY STATISTICS
FINDING NUMBER
ALLOWABLE COSTS
Routine Services
1
Incorrect Expense Classifications
2
Self-insurance Reserve Fund
3
Nurse Aide Testing and Training Costs
Special Services
1
Incorrect Expense Classifications
Dietary
1
Incorrect Expense Classifications
2
Self-insurance Reserve Fund
Laundry and Housekeepinr
1
Incorrect Expense Classifications
2
Self-insurance Reserve Fund
Operation and Maintenance ofPlant
1
Incorrect Expense Classifications
2
Self-insurance Reserve Fund
4
Costs Not Related to Patient Care
$
(3,669)
1,414
(282) $
$
(290)
166
$
921
161
$
(194)
55
(3,739)
(2,537) 97
(124) 1,082 (3,878)
10
Nursing Facilities Services Program
FINDING NUMBER
ALLOWABLE COSTS
Administrative and General
1
Incorrect Expense Classifications
2
Self-insurance Reserve Fund
5
Allocations from Home Office
$
6,521
63
(16,435)
(9,851)
Property and Related Expenses
1
Incorrect Expense Classifications
(3,386)
Total Audit Findings Affecting Allowable Costs
$====(1=8=,5=97=)
PATIENT DAY STATISTICS
6
Decrease in Patient Day Statistics
(12)
1997 Audit Report: Dublinair Health Care Center
11
SCHEDULE OF ALLOWABLE COSTS AND PATIENT DAY STATISTICS
ALLOWABLE COSTS
COST REPORT TOTALS
FIELD AUDIT FINDINGS
AUDITED TOTALS
Routine Services
$ 1,876,621 $ (2,537) $ 1,874,084
Special Services
33,322
97
33,419
Dietary
406,238
(124)
406,114
Laundry and Housekeeping
236,487
1,082
237,569
Operation and Maintenance ofPlant
297,689
(3,878)
293,811
Administrative and General
442,578
(9,851)
432,727
Property and Related Expenses
346,331
(3,386)
342,945
Total Allowable Costs
$ 3,639,266 $ (18,597) $ 3,620,669
PATIENT DAY STATISTICS
52,892
(12)
52,880