G11 ff!Oo.m4 RI /Jiii-iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii~ G44b iq9t.q . DEPARTMENT OF AUDITSAND ACCOUNTS Medicaid and Local Government Audits AUDIT REPORT FOR THE YEAR ENDED SEPTEMBER 30, 1995 GLENN-MOR NURSING. HOME MEDICAID PROVIDER NUMBER 00141149A NURSING FACILITIES SERVICES PROGRAM TABLE OF CONTENTS LETTER OF TRANSMITTAL .............................. i INTRODUCTION . . . . . . 1 e FINDINGS AND RECOMMENDATIONS .................... 5 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 October 30, 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., Suite 27-100 Atlanta, Georgia 30303 Ladies and Gentlemen: This report provides the results of our audit of Glenn-Mor Nursing Home, provider number 00141149A, a participant in the Nursing Facilities Services Program for the year ended September 30, 1995. 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. CLV/dm/bw Respectfully Submitted, ~ Claude L. Vickers State Auditor 1996 Audit Report: Glenn-Mor Nursing Home 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 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 Glenn-Mor Nursing Home, a 64-bed long-term health care facility located in Thomasville, 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. John 2 Nursing Facilities Services Program Audit Objectives D. Archbold Memorial Hospital Board of Trustees operated both John D. Archbold Memorial Hospital and Glenn-Mor Nursing Home in separate physical facilities during the year under review. The purpose of this audit was to determine whether Glenn-Mor Nursing Home maintained adequate documentation to support the allowable costs and patient day statistics reported in its Nursing Home Cost Report for the year ended September 30, 1995; and to determine whether Glenn-Mor Nursing Home 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; determine if the provider meets the requirements for classification as a hospital-based nursing home outlined in DMA Policies and Procedures for Nursing Facility Se-rvices, Section 1002.l(g); and 1996 Audit Report: Glenn-Mor Nursing Home 3 Scope and Methodology recommend appropriate action based on the results of our audit. 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. Allowable costs reported on the Nursing Home Cost Report include both direct costs of the nursing facility and indirect costs allocated to it from John D. Archbold Memorial Hospital. These indirect cost allocations result from the step-down of general service costs from the hospital as shown on the hospital's Medicare cost report. Our audit did not include tests ,of either these indirect costs or the reclassifications and adjustments made to determine net expenses for cost allocation on the Medicare cost report worksheets. These costs are subject to audit by the Medicare intermediary. Any audit findings by the Medicare intermediary related to indirect costs that impact the 4 Nursing Facilities Services Program nursing facility will be reflected in the Medicaid cost report in the year the Medicare cost report is final-settled. The Department ofAudits and Accounts is responsible for providing the Department ofMedical Assistance with information regarding the accuracy of cost and patient data for Glenn-Mor Nursing Home for the year ended September 30, 1995. 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. 1996 Audit Report: Glenn-Mor Nursing Home 5 FINDINGS AND RECOMMENDATIONS Finding No.1 Hospital-Based Status The provider was in compliance with the Department of Medical Assistance's requirements for classification as a hospital-based nursing home as specified in DMA Policies and Procedures for Nursing Facility Services, Section 1002.l(g). Incorrect Expense Classifications Finding No.2 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 ofMedical Assistance make the following adjustment to reclassify costs to the appropriate cost centers. (DMA Policies and Procedures, Appendix D) COST CENTER Routine Services Employee Benefits Expense Medical Records Supplies Supplies Special Services Medical Record Supplies Supplies Dietary Lease Expense Medical Record Supplies Supplies $ (13,001) (1,330) (12,809) $ $ (127) (149) $ (450) (1,023) 214 (27,140) (276) (1,259) 6 Nursing Facilities Services Program Operation and Maintenance of Plant Supplies Administrative and General Employee Benefits Expense Medical Record Supplies Supplies Property and Related Expenses Lease Expense Total Adjustment to Allowable Costs $ 13,001 2,629 (4,489) $ 17,084 11,141 450 0 Costs Not Related to Patient Care Finding No.3 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; DMA Policies and Procedures Section 1002.l(k)) ITEMS Advertising Patient Personal Purchases $ (136) (585) $===(=7=21=) COST CENTER Routine Services Special Services Total Adjustment to Allowable Costs $ (585) (136) $===(=72=1=) 1996 Audit Report: Glenn-Mor Nursing Home 7 SUMMARY OF AUDIT FINDINGS AFFECTING ALLOWABLE COSTS AND PATIENT DAY STATISTICS FINDING NUMBER ALLOWABLE COSTS Routine Services 2 Incorrect Expense Classifications 3 Costs Not Related to Patient Care $ (27,140) (585) $ Special Services 2 Incorrect Expense Classifications 3 Costs Not Related to Patient Care $ (276) (136) Dietary 2 Incorrect Expense Classifications Operation and Maintenance ofPlant 2 Incorrect Expense Classifications Administrative and General 2 Incorrect Expense Classifications ProperfJ! and Related Expenses 2 Incorrect Expense Classifications Total Audit Findings Affecting Allowable Costs $ (27,725) (412) (1,259) 17,084 11,141 450 (721) 8 Nursing Facilities Services Program SCHEDULE OF ALLOWABLE COSTS AND PATIENT DAY STATISTICS COST REPORT TOTALS FIELD AUDIT FINDINGS AUDITED TOTALS ALLOWABLE COSTS Routine Services $ 694,453 $ (27,725) $ 666,728 Special Services 156,645 (412) 156,233 Dietary 358,125 (1,259) 356,866 Laundry and Housekeeping 127,334 127,334 Operation and Maintenance of Plant 202,976 17,084 220,060 Administrative and General 293,157 11,141 304,298 Property and Related Expenses 216,064 450 216,514 Total Allowable Costs $ 2,048,754 $ (721) $ 2,048,033 ======= PATIENT DAY STATISTICS 22,802 22,802