Audit report, for the year ended June 30, 1997, Dublinair Health Care Center, Medicaid provider no. 00059947A, Nursing Facility Services Program [June 30, 1997]

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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