GA AgoO. Mif~iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii---iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii l<\ iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii ~ Rtf DEPAR.TMENTOF AUDITS AND ACCOUNTS iL195-clbMedicaidandLocal Government Audits AUDIT REPORT FOR.THEYEARENDEDJUNE.30, 1996 REST .AWHILE NURSING HOME .. MEDICAIDPROVII)ER NUMBER 00142711A .NURSING FACILITIES SERVICES PROGRAM TABLE OF CONTENTS LETTER OF TRANSMITTAL i INTRODUCTION 1 e 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 STATEAUDITOR 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 3,1997 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 ofour audit ofRest Awhile Nursing Home, provider number 00142711A, 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 ofMedical 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/tm/bw 1996 Audit Report: Rest Awhile 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 s~bject 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 Rest Awhile Nursing Home, a 59-bed long-term health care facility located in Moultrie, 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. Rest 2 Nursing Facilities Services Program Audit Objectives Awhile Nursing Home was operated as a freestanding nursing home by Green Enterprises, Inc., for the year ended June 30, 1996. The purpose of this audit was to determine whether Rest Awhile 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 June 30, 1996; and to determine whether Rest Awhile 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 ofthis 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: Rest Awhile Nursing Home 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 of Audits and Accounts is responsible for providing the Department ofMedical Assistance with information regarding the accuracy of cost and patient data for Rest Awhile Nursing Home for the year ended June 30, 1996. If the Department of Medical Assistance implements the recommendations in this report by adjusting the allowable costs 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 Prior Year Audit Adjustments Documentation examined during the audit showed that adjustments made to the prior year allowable costs that affected current year costs were not reflected in the cost report for the period under review. We recommend that the provider implement policies and procedures to ensure that adjustments made to prior year allowable costs are considered in preparing future year cost reports. We recommend that the Department of Medical Assistance make the following adjustment to decrease allowable costs for the effect of those prior year audit adjustments. COST CENTER Routine Services Special Services Dietary Laundry and Housekeeping Operation and Maintenance of Plant Administrative and General Total Adjustment to Allowable Costs $ (2,248) 85 181 158 37 32 $,====(=1,=75=5=) Finding No.2 Costs Not Related to Patient Care Allowable costs claimed included payments for cable television 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, 2106.1) 1996 AuditReport: Rest Awhile Nursing Home 5 COST CENTER Special Services $=====(=85=4=) Finding No.3 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 Department of Medical Assistance make the following adjustment to remove the undocumented expenses from allowable costs. (HCFA Pub. 15-1 Section 2304) COST CENTER Operation and Maintenance of Plant $=====(=18=0=) Finding No.4 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. (DMA Policies and Procedures, Appendix D) 6 Nursing Facilities Services Program COST CENTER Operation and Maintenance of Plant Post Office Box Rental Administrative and General Insurance Expense Post Office Box Rental Property and Related Expenses Insurance Expense Total Adjustment to Allowable Costs $ (104) $ 10,000 104 10,104 (10,000) o $===:::::::r::: Finding No.5 Office Audit Adjustment Reversal An adjustment was made during the office audit to remove excess compensation for the assistant administrator. Documentation examined during the audit showed that the assistant administrator works as maintenance supervisor for two hours each week. The compensation for the maintenance supervisor was included in the total for the assistant administrator. We are reversing the allowable portion of the maintenance supervisor compensation. We recommend that the Department ofMedical Assistance make the following adjustment to reverse a portion of the office audit adjustment. COST CENTER Administrative and General $===:::::::::1:1::1::: Finding No.6 Individual Accounts Receivable Listing The provider did not maintain an individual accounts receivable listing. We recommend that the provider implement policies and procedures to ensure that an individual accounts receivable list is maintained. We further recommend that the Department o~ Medical Assistance review this matter and determine whether any credit balances exist. (HCFA Pub. 15-1 Section 2408.2) 1996 Audit Report: Rest Awhile Nursing Home 7 SUMMARY OF AUDIT FINDINGS AFFECTING ALLOWABLE COSTS AND PATIENT DAY STATISTICS FINDING NUMBER ALLOWABLE COSTS Routine Services 1 Prior Year Audit Adjustments $ Special Services 1 Prior Year Audit Adjustments 2 Costs Not Related To Patient Care $ 85 (854) Dietary 1 Prior Year Audit Adjustments Laundry and Housekeeping 1 Prior Year Audit Adjustments Operation and Maintenance ofPlant 1 Prior Year Audit Adjustments 3 Lack Of Sufficient Documentation 4 Incorrect Expense Classifications $ 37 (180) (104) Administrative and General 1 Prior Year Audit Adjustments 4 Incorrect Expense Classifications \ 5 Office Audit Adjustment Reversal $ 32 10,104 111 Property and Related Expenses 4 Incorrect Expense Classifications Total Audit Findings Affecting Allowable Costs $ (2,248) (769) 181 158 (247) 10,247 (10,000) (2,678) SCHEDULE OF ALLOWABLE COSTS AND PATIENT DAY STATISTICS 00 COST REPORT TOTALS OFFICE AUDIT FINDINGS (1) FIELD AUDIT FINDINGS AUDITED TOTALS ALLOWABLE. COSTS Routine Services $ 592,959 $ $ (2,248) $ 590,711 Special Services 48,627 (769) 47,858 Dietary 175,524 181 175,705 Laundry and Housekeeping 122,925 158 123,083 Operation and Maintenance of Plant 83,492 (1,831) (247) 81,414 Administrative and General 168,506 286 10,247 179,039 Property and Related Expenses 93,650 (10,000) 83,650 Total Allowable Costs $ 1,285,683 $ (1,545) $ (2,678) $ 1,281,460 =z (J=.~Q... -~ n~ .............. ~ f'-l PATIENT DAY STATISTICS 21,361 21,361 rJJ ~ .~... (I) An office audit of the provider was performed before this field audit. The results of the office audit are included in this column n ~ for informational purposes. .,f'-l ~ .,Q (JQ a~